Tag Archives: AEI International Center on Housing RIsk

The American Enterprise Institute’s (AEI) International Center on Housing Risk has released a new installment of its National Housing Market Index (NHMI), examining the state of the market in the second half of 2017 and where it’s likely to go ...

What led to risk of default on agency first-time buyer mortgages reaching a series high in April?

First-time buyer volume rose significantly in March 2016, driven by continued labor market improvements, riskier mortgage lending, and historically low mortgage rates.

What is driving the increasing disparity in risk between Agency first-time buyer mortgage loans and repeat buyer mortgage loans?

First-time buyer mortgages with a government guarantee were at a much higher risk of default than those taken out by repeat buyers. What factors are behind the disparity?

The riskiness of agency purchase loans has increased year-over-year every month since January 2014. What is driving the constant rise in risk?

The share has risen above previous year levels since April 2015, reflecting improvements within the labor market, riskier mortgage lending, and continuing low mortgage rates.

Also according to AEI's July report, 71 percent of Agency purchase loans had down payments of 5 percent or less, and 25 percent of them had DTI ratios greater than the QM limit of 43 percent. The median FICO score for first-time buyers was 709, a bit below the median for all individuals in the United States.