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CoreLogic Says Overall Credit Risk Similar to Early 2000s
Irvine, CA-based CoreLogic’s Q1 2017 CoreLogic Housing Credit Index (HCI) reveals that credit risk for new home loan originations increased to 105.6, up 3.6 points from Q1 2016. Even so, the level of credit risk in Q1 2017 is nearly the same as the average of 105.9 for the period of 2001 to 2003, the benchmark for normal credit risk.
“Mortgage rates during the first quarter of 2017 were up about 0.5 percentage points from a year earlier,” said CoreLogic’s chief economist Dr. Frank Nothaft. “Since 2009, for every one-half percentage point increase in mortgage rates, the average credit score on refinance borrowers has dipped by 9 points, and this pattern will likely continue if mortgage rates move higher.”
Other key report findings include:
- Average credit score for homebuyers increased 7 points year-over-year between Q1 2016 and Q1 2017, rising from 734 to 741. In Q1 2017, the share of homebuyers with credit scores under 640 was less than 3% compared with 25% in 2001
- Debt-to-Income is holding steady at 36%, the average DTI for homebuyers in Q1 2017 was similar to Q1 2016
- LTV for homebuyers fell by 1.7% points between Q1 2016 and Q1 2017 from 87.6% to 85.9%. In Q1 2017, the share of homebuyers with an LTV greater than or equal to 95% was 43%, down from 49% in Q1 2016 and up from 29% in 2001.
- Investor share of home-purchase loans increased from 4% in Q1 2016 to 5% in Q1 2017
Housing Credit Index
Purchase Money Credit Risk
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