MBA Economic and Mortgage Finance Outlook Eastern Secondary Market Conference 2018

Transcription

1 MBA Economic and Mortgage Finance Outlook Eastern Secondary Market Conference 2018 February 2018 Presented by Joel Kan Mortgage Bankers Association 1

2 Summary of the MBA Outlook GDP Growth 1.8% 2.5% 2.3% 2.2% 2.0% Inflation 1.3% 2.1% 2.1% 2.2% 2.8% Unemployment 4.9% 4.4% 3.8% 3.8% 4.0% Fed Funds 0.625% 1.375% 2.375% 3.125% 3.125% 10-year Treasury 2.1% 2.4% 3.0% 3.4% 3.7% 30-year Mortgage 3.8% 4.0% 4.8% 5.3% 5.6% New home sales (000s) Existing home sales (000s) 5,440 5,538 5,681 5,820 5,981 Purchase originations ($B) 1,052 1,110 1,183 1,250 1,317 Refi originations ($ B) Total originations ($B) 2,051 1,710 1,609 1,645 1,712 Mortgage debt outstanding ($B) 9,710 10,010 10,370 10,760 11,130 Source: MBA Forecast Jan

3 MBA Originations Forecast Source: MBA Forecast Jan

4 Job Growth Strong in 2017, Solid Start to 2018 Source: Bureau of Labor Statistics 4 4

5 Wages Growing Slowly Source: Federal Reserve Bank of Atlanta 5 5

6 Employment for Year Old Workers Recently Surpassed 2000 Levels Source: Bureau of Labor Statistics 6 6

7 Core Inflation Flirting with 2 Percent Source: Bureau of Labor Statistics 7 7

8 Changes to Fed s Balance Sheet Source: Federal Reserve Bank of New York 8 8

9 Global Yields Have Started to Increase Source: Thomson Reuters 9 9

10 Refinance Activity Still Low Source: MBA Weekly Applications Survey 10 10

11 Purchase Applications Continue to Strengthen Source: MBA Weekly Applications Survey 11 11

12 Declining Inventories for Sale Constraining Existing Home Sales Source: NAR, MBA 12 12

13 Lack of Labor Holding Back Single Family Housing Starts Source: BLS, NAHB 13 13

14 House Price Growth Outpacing Income Growth; Price Gains to Slow Source: FHFA, BLS 14 14

15 Larger Loan Balances Still Lead Growth Source: MBA Weekly Applications Survey 15 15

16 Tax Reform Impact: MID Change at State Level Source: MBA analysis of HMDA data 16 16

17 Household Home Equity Positions Continue to Improve Source: Federal Reserve 17 17

18 Overall Mortgage Debt Outstanding Source: Federal Reserve, MBA Forecast 18 18

19 Mortgage Delinquency Rates Seasonally adjusted, excludes loans in foreclosure Percent Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Days Delinquent 60 Days Delinquent 90+ Days Delinquent Source: NDS: National Delinquency Survey: 19

20 16.00 Mortgage Delinquency Rates by Loan Type Seasonally adjusted, based on loan count, excludes loans in foreclosure Percent Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q All Loans Conventional Loans FHA Loans VA Loans Source: NDS: National Delinquency Survey: 20

21 Looking Back at Hurricane Katrina Hurricane Katrina Aug 2005 Delinquency and Foreclosure Metrics - Louisiana Non-seasonally adjusted, percent Total Past Due Foreclosure Starts Source: NDS: National Delinquency Survey: 21

22 6.00 Texas: Mortgage Delinquency Rates Non- seasonally adjusted, excludes loans in foreclosure Percent Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Days Delinquent 60 Days Delinquent 90+ Days Delinquent Source: NDS: National Delinquency Survey: 22

23 8.00 Florida: Mortgage Delinquency Rates Non- seasonally adjusted, excludes loans in foreclosure 7.00 Percent Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Days Delinquent 60 Days Delinquent 90+ Days Delinquent Source: NDS: National Delinquency Survey: 23

24 14.00% All Loans: Trend in Seriously Delinquent Rate 12.00% Seriously Delinquent Rate (NSA) 10.00% 8.00% 6.00% 4.00% % 0.00% Months Since Origination (January 1, YYYY = Origination Year) Source: NDS: National Delinquency Survey: 24

25 1.30% All Loans: Trend in Seriously Delinquent Rate 1.10% Seriously Delinquent Rate (NSA) 0.90% 0.70% 0.50% 0.30% % -0.10% Months Since Origination (January 1, YYYY = Origination Year) Source: NDS: National Delinquency Survey: 25

26 $3,500 $3,000 Chart of the Week - July 21, 2017 Servicing Costs per Loan (Single-Family): Performing vs. Non-Performing Cost of Performing Loans Cost of Non-Performing Loans 2,884 $2,500 $2,000 2,304 2,414 2,000 2,386 2,113 1,826 $1,500 1,369 $1,000 $500 $ Source: MBA s Servicing Operations Study and Forum (Prime Servicers): 26

27 Direct Servicing Expenses ($ per loan) 4.11% 4.11% 4.46% Direct Servicing Expense - Prime ($ per loan) Direct Servicing Expense NDS 90+ day Delinquency Rate (% based on #, annualized) 5.00% 4.50% 3.46% 3.03% 4.00% 3.50% 2.63% 2.30% 3.00% 2.50% 1.82% 1.51% 1.31% 2.00% 1.50% 1.00% 0.50% H % Source: MBA s Servicing Operations Study and Forum (Prime Servicers): PGR 1H

28 IMB Fully-Loaded Production Expenses ($ per loan) $900 Fully-Loaded Production Expense ($ per loan) Avg. Production Volume ($M) $800 $700 $600 $500 $400 $300 $200 $100 5,163 5,603 5,779 5,818 6,368 6,959 8,025 6,932 6,769 7,000 7,195 6,984 7,080 7,747 7,845 7,120 6,969 7,562 8,887 7,774 8,060 $0 Q317 Q217 Q117 Q416 Q316 Q216 Q116 Q415 Q315 Q215 Q115 Q414 Q314 Q214 Q114 Q413 Q313 Q213 Q113 Q412 Q312 Source: MBA s Quarterly Mortgage Bankers Performance Report, 28

29 What Do You Perceive is the Biggest Benefit from Offering a Digital Mortgage? MBA s 2018 Digital Mortgage Technology Profile; 29

30 What is the Biggest Inhibitor to Your Ability to Offer a Fully Digital Experience? Lack of vendor options to meet our vision 32% Business leaders need to determine what they want first Other Limited Funding to build it 26% 26% 11% Not knowing how to accomplish it 5% MBA s 2018 Digital Mortgage Technology Profile; 30

31 Contact Information and MBA Resources Joel Kan Associate Vice President Research and Economics MBA Research: RIHA: 31