-

Milliman analysis: Mortgage default risk increases slightly alongside decrease in home price appreciation

Purchase volume continues to decrease, but quality of loans remains strong

SEATTLE--(BUSINESS WIRE)--Milliman, Inc., a premier global consulting and actuarial firm, today announced the third quarter (Q3) 2023 results of the Milliman Mortgage Default Index (MMDI), which shows Milliman’s latest monthly estimate of the lifetime default risk of U.S.-backed mortgages.

Mortgage default risk increased to 3.10% for loans acquired in Q3 2023, compared to 3.03% for loans acquired during Q2 2023. A projected decrease in home price appreciation has caused the slight increase in default risk for 2023 Q3.

Looking at the components of default risk over 2023 Q3, the economic risk for GSE loans increased quarter over quarter, from 1.54% in 2023 Q2 to 1.64% in 2023 Q3. Borrower risk decreased from 1.51% in 2023 Q2 to 1.48% in 2023 Q3, with purchase loans making up the bulk of originations at about 89% of total volume. Underwriting risk remains low and is negative for purchase mortgages. About 70% of refinance originations were cash-out refinance.

“Purchase volume has been decreasing year-over-year, but the quality of loans from a risk perspective has continued to be strong, keeping the default risk of new loan originations low,” said Jonathan Glowacki, a principal at Milliman and co-author of the MMDI.

The MMDI reflects a baseline forecast of future home prices. For more on the MMDI, go to www.milliman.com/mmdi. To access additional mortgage market thought-leadership, analytics, and technology go to https://www.milliman.com/en/products/milliman-m-pire.

About Milliman

Milliman is among the world's largest providers of actuarial, risk management, and technology solutions. Our consulting and advanced analytics capabilities encompass healthcare, property & casualty insurance, life insurance and financial services, and employee benefits. Founded in 1947, Milliman is an independent firm with offices in major cities around the globe. Visit us at milliman.com.

Contacts

Johnathan Glowacki
Milliman, Inc.
Tel: +1 262 641 3560
Johnathan.Glowacki@milliman.com

Industry:

Milliman, Inc.

Release Summary
Milliman has just released the latest results of its Mortgage Default Index.
Release Versions
English

Contacts

Johnathan Glowacki
Milliman, Inc.
Tel: +1 262 641 3560
Johnathan.Glowacki@milliman.com

More News From Milliman, Inc.

Milliman analysis: Corporate pension funding levels rise for eighth consecutive month in November

SEATTLE--(BUSINESS WIRE)--Milliman, Inc., a premier global consulting and actuarial firm, today released its monthly Milliman 100 Pension Funding Index (PFI), which analyzes the 100 largest U.S. corporate pension plans. During November, the PFI funded ratio edged up from 107.0% at the end of October to 107.1% as of November 30. A 1-basis-point rise in discount rates, to 5.34% in November, drove this result. It shaved $3 billion from plan liabilities and offset market returns of only 0.44%. As o...

Milliman analysis: Public pension funding rises in October to highest level in study history

SEATTLE--(BUSINESS WIRE)--Milliman, Inc., a premier global consulting and actuarial firm, today released the latest results of its Public Pension Funding Index (PPFI), which analyzes data from the nation’s 100 largest public defined benefit plans. For the seventh straight month, the PPFI funded ratio improved in October, rising from 85.4% as of September 30 to 86.3% as of October 31, surpassing the previous high-water mark of 85.5% set at the end of 2021. Another month of strong investment retu...

Milliman CareFlowIQ Strengthens Real-Time Clinical Intelligence Platform with Expanded Medication History from Surescripts

SEATTLE--(BUSINESS WIRE)--Milliman CareFlowIQ™, transforming fragmented healthcare data into trusted, proven, evidence-based insights for informed decision-making, announces expanded medication reconciliation capabilities from Surescripts, the nation's leading health intelligence network. With Surescripts Medication History for Reconciliation, CareFlowIQ will give healthcare providers unprecedented access to comprehensive, real-time patient medication history. This data enhances whole-patient v...
Back to Newsroom