Black Knight’s Mortgage Monitor: Tappable Equity Sees Greatest Calendar-Year Rise on Record, Increasing $735 Billion in 201...
April 02 2018 - 9:00AM
Today, the Data & Analytics division of Black Knight, Inc.
(NYSE:BKI) released its latest Mortgage Monitor Report, based on
data as of the end of February 2018. This month, Black Knight
revisited the nation’s equity landscape, finding that as home
prices continued to increase so has the amount of tappable, or
lendable, equity available to Americans with mortgages. Black
Knight defines tappable equity as the total amount of equity a
homeowner with a mortgage has available to borrow against before
reaching a maximum loan-to-value ratio (LTV) of 80 percent. As
Black Knight Data & Analytics Executive Vice President Ben
Graboske explained, rising home prices have pushed the total amount
of such equity to a record high.
“As home prices continued their upward trajectory at the
national level, the amount of tappable equity available to
homeowners with mortgages continued to rise as well,” said
Graboske. “Tappable equity rose by $735 billion over the course of
2017, the largest calendar year increase by dollar value on record.
At $5.4 trillion, total tappable equity is also the highest on
record and 10 percent above the previous, pre-recession peak in
2005. An estimated $262 billion in tappable equity was withdrawn in
2017 via cash-out refinances and home equity lines of credit
(HELOCs), also reaching a new post-recession peak. Still, Americans
seem more reserved in tapping their equity than in years past,
withdrawing less than 1.25 percent of all tappable
equity available in Q4 2017 – a four-year low. Of that total,
55 percent was tapped via HELOCs, the second lowest such share
since the housing recovery began. However, as interest rates rise,
it is likely that we will see the HELOC share of equity withdrawals
increase as well.
“At the start of 2018, some 55 percent of all tappable equity
was held by borrowers with first-lien interest rates below the
going 30-year rate. Following the nearly 50 basis points rise in
interest rates we’ve seen since the start of the year, that share
has ballooned to 75 percent. While rising rates tend to dampen
utilization of equity in general, the market is poised for a strong
shift toward HELOCs, as they allow borrowers to take advantage of
growing equity while holding on to historically low first-lien
interest rates. Over half of all tappable equity –
approximately $2.8 trillion – is held by borrowers with credit
scores of 760 or higher and first-lien interest rates below today’s
prevailing rate, which creates a large pocket of low-risk HELOC
candidates.”
The data also showed that risk remains relatively low among
cash-out refinance originations as well. The average cash-out
refinance borrower in 2017 had an average credit score of 744 (down
from 750 in 2016) and pulled $68,000 in equity (up from $64,000)
with a resulting loan-to-value ratio (LTV) of 66 percent.
Approximately 40 percent of remaining cash-out refinance candidates
– those borrowers with both tappable equity and current first-lien
rates of 4.5 percent or higher – have credit scores above 760. As
borrowers with higher credit scores tend to have higher average
equity amounts, approximately 50 percent of all tappable equity
among borrowers with first-lien rates of 4.5 percent or higher is
held by that group.
|
|
|
As was reported in Black Knight’s most recent First Look news
release, other key results include: |
Total
U.S. loan delinquency rate: |
|
4.30% |
Month-over-month change in delinquency rate: |
|
-0.21% |
Total
U.S. foreclosure pre-sale inventory rate: |
|
0.65% |
Month-over-month change in foreclosure pre-sale inventory
rate: |
|
-1.81% |
States
with highest percentage of non-current* loans: |
|
MS, LA, FL, AL, WV |
States
with lowest percentage of non-current* loans: |
|
ID, OR, WA, ND, CO |
States
with highest percentage of seriously delinquent** loans: |
|
FL, MS, LA, TX, AL |
*Non-current totals combine foreclosures and delinquencies as a
percent of active loans in that state. |
**Seriously
delinquent loans are those past-due 90 days or more. |
Totals are
extrapolated based on Black Knight’s loan-level database of
mortgage assets. |
|
|
|
About the Mortgage MonitorThe Data &
Analytics division of Black Knight manages the nation's leading
repository of loan-level residential mortgage data and performance
information on the majority of the overall market, including tens
of millions of loans across the spectrum of credit products and
more than 160 million historical records. The company's research
experts carefully analyze this data to produce a summary
supplemented by dozens of charts and graphs that reflect trend and
point-in-time observations for the monthly Mortgage Monitor Report.
To review the full report, visit:
http://www.BKFS.com/CorporateInformation/NewsRoom/Pages/Mortgage-Monitor.aspx
About Black KnightBlack Knight
(NYSE:BKI) is a leading provider of integrated software, data and
analytics solutions that facilitate and automate many of the
business processes across the homeownership lifecycle.
As a leading fintech, Black Knight is committed to being a
premier business partner that clients rely on to achieve their
strategic goals, realize greater success and better serve their
customers by delivering best-in-class software, services and
insights with a relentless commitment to excellence, innovation,
integrity and leadership. For more information on Black Knight,
please visit http://www.blackknightinc.com/.
|
|
|
For more
information: |
|
|
|
|
|
Michelle Kersch
|
|
Mitch Cohen |
904.854.5043 |
|
704.890.8158 |
michelle.kersch@bkfs.com |
|
mitch.cohen@bkfs.com |
Black Knight (NYSE:BKI)
Historical Stock Chart
From Mar 2024 to Apr 2024
Black Knight (NYSE:BKI)
Historical Stock Chart
From Apr 2023 to Apr 2024