Monday, September 10, 2018

Black Knight Mortgage Monitor for July

by Bill McBride on 9/10/2018 10:12:00 AM

Black Knight released their Mortgage Monitor report for July today. According to Black Knight, 3.61% of mortgages were delinquent in July, down from 3.74% in June 2017. Black Knight also reported that 0.57% of mortgages were in the foreclosure process, down from 0.78% a year ago.

This gives a total of 4.18% delinquent or in foreclosure.

Press Release: Black Knight’s July 2018 Mortgage Monitor

Today, the Data & Analytics division of Black Knight, Inc.released its latest Mortgage Monitor Report, based on data as of the end of July 2018. This month, Black Knight looked at full Q2 2018 data to revisit the nation’s equity landscape. Despite the slowdown in the rate of home price appreciation seen throughout the second quarter, total tappable equity – the amount of equity available to homeowners with mortgages to borrow against before hitting a maximum 80 percent combined loan-to-value ratio – reached a record high. As Ben Graboske, executive vice president of Black Knight’s Data & Analytics division explained, even though Q2 2018 experienced the fourth strongest quarterly gain in equity since the housing recovery began, the slowing in growth observed was noteworthy.

“As the second quarter came to a close, the total amount of tappable equity available to homeowners with mortgages surpassed the $6 trillion mark for the first time in history,” said Graboske. “There is now $636 billion more tappable equity available than at the start of 2018, and nearly three times as much compared to the bottom of the market in 2012. Despite the noticeable slowing in home price appreciation over the past four months that Black Knight has reported on recently, some 44 million homeowners now have equity that could be tapped via cash-out refinances or home equity lines of credit (HELOCs). Although total available equity broke an all-time record, we observed strong and unseasonable quarterly slowing in equity growth. While Q2’s $256 billion increase in tappable equity was the fourth strongest quarterly growth since the housing recovery began, the decline from Q1’s $381 billion was significant, particularly given that historically, Q1 and Q2 are responsible for the bulk of equity growth in any given year.
emphasis added
BKFS Click on graph for larger image.

This graph from Black Knight shows their estimate of "tappable equity".

From Black Knight:
• Despite slower home price growth, tappable equity surpassed $6 trillion for the first time in Q2 2018

• There is now 2.7X as much tappable equity as at the bottom of the housing market in 2012 and 21% more than at the pre-crisis peak in 2006
The second graph shows First Lien mortgage activity:
• First lien mortgage originations rose 20% from Q1 due to seasonal growth in purchase lending, but were down 7% from Q2 2017 by dollar volume

• Purchase lending saw a slightly lower-than-average 49% seasonal increase from the first quarter and remained relatively flat from one year ago

• The number of purchase originations rose 2.0% year-over-year, and purchase lending was up marginally by volume as well

• Refinance originations dropped to $117B for the lowest quarterly total since Q1 2014, and at 484K, Q2 saw the fewest refinance loans originated in more than 17 years

• Refinance loans made up just 25% of Q2 originations by volume, the lowest such share in 18 years
There is much more in the mortgage monitor.