Tuesday, November 07, 2017

Black Knight Mortgage Monitor: 2017 Hurricane Impact on Mortgage Performance Worse than Katrina

by Bill McBride on 11/07/2017 08:01:00 AM

Black Knight released their Mortgage Monitor report for September today. According to Black Knight, 4.40% of mortgages were delinquent in September, up from 4.27% in September 2016. Black Knight also reported that 0.7o% of mortgages were in the foreclosure process, down from 1.00% a year ago.

This gives a total of 5.10% delinquent or in foreclosure.

Press Release: Black Knight’s Mortgage Monitor: Despite Continued Home Price Acceleration, Housing Remains More Affordable Than Long-Term Benchmarks

Today, the Data & Analytics division of Black Knight, Inc. (NYSE: BKI) released its latest Mortgage Monitor Report, based on data as of the end of September 2017. Given continued acceleration in the rate of home price appreciation observed across most of the country, Black Knight thought it pertinent to examine both the current state of home affordability as well as potential impacts of future home price and interest rate increases on the home affordability landscape.

“Rising home prices continue to offset the majority of would-be savings from recent interest rate declines, which has kept home affordability near a post-recession low,” said Ben Graboske, Executive Vice President - Data & Analytics, Black Knight. “That being said, when viewing the market through a longer-term lens, affordability across most of the country still remains favorable to long-term benchmarks.”
...
In looking at the affordability landscape across the country, we certainly see varying levels of affordability in each market compared to their own long-term benchmarks,” Graboske explained. “But, by and large, the overall theme is that affordability in most areas, while tightening, remains favorable to long-term norms.” When looking at state-level data, payment-to-income ratios in 47 of 50 states remain below their 1995-2003 averages. Only Hawaii, California, Oregon, and Washington, D.C., have higher payment-to-income ratios today than their longer-term benchmarks.
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In addition to affordability, Black Knight also took an in-depth look at the effect of recent hurricanes on mortgage performance and determined that Hurricanes Harvey and Irma have likely accounted for an increase of 135,800 past-due mortgages nationwide. The combined impacts of these two storms, which are being credited with a 27 bps rise in the national non-current rate – has already surpassed that of Hurricane Katrina in 2005 and is expected to increase further in October results, where the heaviest impact from Hurricane Irma is expected to be seen.
emphasis added
BKFS Click on graph for larger image.

This graphic from Black Knight looks at the delinquency roll count over time.

From Black Knight:
• Over 621,000 borrowers that were current on mortgage payments as of August became 30 days delinquent in September. This marks the highest single month inflow of delinquent loans in nearly 3 years

• Increases in delinquent loan volumes are common for the month of September, but this month’s inflow was also impacted by the effects of hurricanes Harvey and Irma

• Later-stage delinquency rolls also increased with 30day to 60-day delinquency rolls hitting a 21-month high and 60-day to 90-day delinquency rolls hitting a 10-month high
There is much more in the mortgage monitor.