202122 Nov

The Pandemic Market Is Not A Repeat Of 2007, Milliman Reports

Summary

Milliman Inc., a global consulting and actuarial film, announced the 2021 second quarter results for the Milliman Mortgage Default Risk (MMDI), showing the latest monthly estimate for the lifetime risk of U.S. - backed mortgages. Although purchase loans remained strong in the second quarter, an uptick in interest rates caused refinances to fall by 30%, which are typically viewed as lower risk. However, today’s economic drivers of home price appreciation are more about supply-constraints as opposed to overwhelming demand, relative to the period preceding the global financial crisis. Based on this data, the Milliman researchers have concluded, “We do not believe we are headed for a similar repeat in home price movements and default events in the mortgage market.” Although it is an “interesting” time for the housing market right now, they’ve stated it is not clear how home prices will react when supply returns to the market. Even if there is a decline in home prices or slower price appreciation, the favorable borrower and underwriting risks in the housing market should tamp down the likelihood of mortgage defaults, ultimately reducing the likelihood of another crisis within the mortgage market.”

Source: Nationalmortgageprofessional

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