Fannie Mae and Freddie Mac backed mortgages are hitting a 15-year high, according to the July 2017 Housing Finance at a Glance Monthly Chartbookrecently released by Urban Institute. The share from 2007 to 2013 was approximately 40 percent, but Q1 2017 is reflecting an increase to 47.8 percent. This is one of the few rates that are increasing—but decreasing rates, in this sense, are certainly a good thing.
The appreciating home prices in today’s market are good for those that are under water. According to the report, homes in negative equity (LTV greater than 100) are declining as housing prices appreciate.
Compared to the share of all residential properties with a mortgage, as of Q1 2017, those in negative equity were at 6.1 percent. Properties near negative equity (LTV between 95 and 100) stood at 1.6 percent. To paint the picture, in Q3 2008, those in negative equity were hovering right around 25 percent until around Q4 2012, when rates slowly began to decline.
That’s not the only figure looking better for consumers—90 day delinquencies are resuming their decline after a slight seasonal increase in Q4 of 2016 from 1.60 percent to 1.37 percent in Q1 2017. Foreclosures are falling to 1.39 percent of all loans. Combining both delinquencies, this is down from Q4 2016’s 3.13 percent and Q1 2016’s 3.29 percent to 2.76 percent in Q1 2017.
The Government Sponsored Enterprises (GSE) had a slowing in Home Affordable Refinance Program (HARP) refinances due to the high volume of borrowers who have already done so.
Data from the FHFA Refinance Report and Urban Institute points to this trend continuing, considering the recent rate increases. HARP refinances total 3.46 million since Q2 2009 (HARPs inception), and accounts for 12.6 percent of all GSE refinances in Q1 2016. Compared to all refinances, HARP refinances were 3 percent. This is based on all data that is available until April 2017.