Housing Risk Watch, January 2014

Article Highlights

  • in December, nearly 1/2 of home purchase loans had down payments of 5% or less, and nearly 1/4 had DTI ratios over 43%.

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  • US homeownership rate is 65.3%, similar to in 1960.

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Editor’s Note: Starting with this issue, FHA Watch has been renamed Housing Risk Watch. Housing Risk Watch will cover all facets of housing risk, with a primary focus on government-sponsored risk, including the FHA.

This Issue’s Highlight

Homeownership and the State of the Union

The homeownership rate, as reported by the US Census Bureau, stands today at 65.3 percent. When adjusted for the millions of homeowners who are seriously delinquent, the rate drops to 62.7 percent. This is virtually unchanged from the rate of 61.9 percent in 1960, notwithstanding a dramatic loosening of lending standards over the last 50-plus years. Once again, the National Association of Realtors and community advocacy groups call for a loosening of what they term “tight credit” conditions. Yet, in December, nearly one-half of all home purchase loans had down payments of 5 percent or less, and nearly one-quarter had debt-to-income ratios exceeding 43 percent.

This Month’s Features

Homeownership and the State of the Union
Creating a Straight, Broad Highway to Debt-Free Ownership

Spotlight on Mortgage Risk
Fannie Leads Freddie in Year-over-Year Increase in Risk

Spotlight on Best Price Execution
Delay of Planned GSE Guarantee Fee Increase Adds to Ginnie Agency Price Advantage over Fannie

Spotlight on FHA Insolvency
FHA’s Private GAAP-Estimated Net Worth Declines to Lowest Level in 10 Months

Spotlight on FHA Delinquency
Overall Rate Tops 15 Percent, Highest Level Since June 2013

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