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DS News Webcast: Wednesday 1/28/2015

The market for federally insured home purchase mortgages grew riskier in December, garnering worry from analysts concerned about the government's recent efforts to expand mortgage access. In its latest National Mortgage Risk Index, the American Enterprise Institute's International Center on Housing Risk estimated that 11.84 percent of agency purchase loans would be at risk of default should the economy see another crisis in the near future.

December's index, which saw about 215 thousand new loans added to the pool of risk-rated mortgages, was up 0.4 percentage points from the average for the prior three months and 1.1 percentage points from a year earlier. As ever, the largest portion of risk came from the Federal Housing Administration, which had a risk index of 24.33 percent, up 0.2 percentage points from the prior three-month average. The biggest ongoing problem, according to AEI, is the number of loans with high debt-to-income ratios being approved.

Consumer confidence touched its highest point in more than seven years in January as Americans expressed a much rosier outlook for the economy and the job market. The Conference Board said Tuesday that its monthly Consumer Confidence Index rose to 102.9 this month from an upwardly revised 93.1 in December. According to the group, January's reading was the highest since August 2007, when the index was at 105.6.

About Author: Jordan Funderburk


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