Over the past year, average loan-to-value ratios and debt-to-income ratios are lower on mortgage originations, as is the accompanying risk.
The inaugural Housing Credit Index, a new measure of loan risk compared to 2001, came in
at 48 as of the third quarter of this year.
That turned out to be lower than during the same three-month period last year, indicating that the level of risk on residential loans has fallen.
CoreLogic Inc., which unveiled the index Tuesday, said that housing risk is also down from 2001, when it was established at 100.
The index peaked at around 125 in the third-quarter 2016
and bottomed out at roughly 45 in the third quarter of 2011.
The report indicated that average credit scores on purchase-money mortgages were 739 in the most-recent period.
In the District of Columbia, the average credit score on purchase-money loans was 764 — higher than in any state. Hawaii was next at 751, then California’s 750, Oregon’s 748 and Virginia’s 748.
Mississippi had the lowest average credit score: 715. After that was 722 in West Virginia, then 724 in both Nebraska and Indiana, and 726 in Kansas.
As of the third-quarter 2016, the average LTV ratio was 85.8 percent. Average LTV ratio’s were tighter than 86.8 percent a year earlier.
In addition, mortgages with LTV ratios of at least 95 percent accounted for 43 percent of purchase financing, less than the 47 percent share as of the third quarter of last year.
CoreLogic reported the average DTI ratio at 35.4 percent, also tighter than in the third-quarter 2015 — when the average was 35.7 percent.
DTI ratios of at least 43 percent were reported for 24 percent of purchase-money mortgages, off from a quarter one year earlier.
