by Calculated Risk on 8/03/2020 08:22:00 AM

Black Knight released their Mortgage Monitor report for June today. According to Black Knight, 7.59% of mortgages were delinquent in June, down from 7.76% in May, and up from 3.73% in June 2019. Black Knight also reported that 0.36% of mortgages were in the foreclosure process, down from 0.50% a year ago.

This gives a total of 7.95% delinquent or in foreclosure.

Press Release: Black Knight: Falling 30-Year Interest Rates Result in the Highest Level of Home Affordability in 3.5 Years Nationwide

Today, the Data & Analytics division of Black Knight, Inc. released its latest Mortgage Monitor Report, based upon the company’s industry-leading mortgage performance, housing and public records datasets. As 30-year interest rates hit a record low in recent weeks, Black Knight looked at the impact this has had on refinance incentive, affordability levels, and their broader impact on the mortgage and housing markets.

As Black Knight Data & Analytics President Ben Graboske explained, “Despite eight consecutive years of rising home prices, July’s record-low mortgage rates, which fell below 3% for the first time on July 16, have made purchasing the average-priced home for a median wage earner the most affordable since late 2016. Falling rates and improved affordability have helped to spur home-buying demand, and therefore purchase origination volume, which has provided a much-needed backstop for home prices in the wake of the COVID-19 pandemic.

“As of mid-July, it required 19.8% of the median monthly income to make the mortgage payment on the average-priced home purchase, assuming a 20% down payment and a 30-year mortgage. That was more than 5% below the average of 25% from 1995-2003. This means it currently requires a $1,071 monthly payment to purchase the average-priced home, which is down 6% from the same time last year, despite the average home increasing in value by more than $12,000 during that same time period. In fact, buying power is now up 10% year-over-year, meaning the average home buyer can afford nearly $32,000 more home than they could at the same time last year, while keeping their monthly payment the same.

“A main takeaway from this month’s report is that while record levels of job losses are certainly still weighing on the housing market and broader economy, for those shopping for a home now, buying power has clearly trended up.”
emphasis added

Click on graph for larger image.

Here is a graph from the Mortgage Monitor that shows the National Delinquency Rate.

From Black Knight:

• The national delinquency rate fell in June for the first time since January, as initial impacts of COVID-19 on mortgage performance began to crest

• Nearly 7.6% of mortgage holders remain delinquent, up from a record low 3.2% at the beginning of the year

• The number of borrowers 90 or more days past due surged in June to 1.87 million, the largest volume since 2011

• 90-day delinquencies could rise even higher in July given the secondary volume of new delinquencies seen in May and resulting elevated levels of 60-day delinquencies in June

• The number of early-stage delinquencies has mostly normalized, with 30-day delinquencies nearly back to their pre-COVID levels

• Delinquency numbers will be important to watch in August and September, especially if expanded unemployment benefits decline or expire

There is much more in the mortgage monitor.