Despite some fears of a looming housing bubble, recent data from MGIC Investment Corporation, a provider of primary insurance covering approximately one million mortgages, seems to prove that idea wrong as it reports an increase in insurance policies and a significant decrease in delinquencies.
According to a release from the insurer, in August, MGIC insurance in force increased annually 4.6% from $171.2 billion to $179.1 billion.
This increase is accompanied by a significant decrease in delinquencies.
The beginning primary delinquent inventory decreased 20.9% from last year’s 66,121 loans to 52,298 loans in August. There were 7.8% fewer new delinquency notices in August as these notices fell from last year’s 6,242 notices to 5,753.
That being said, there were also 15.1% fewer cures, which dropped to 5,276 cures, down from last year’s 6,212. There were also 14.5% fewer paids than last year at 1,093, down from 1,279 from August 2015. Recessions and denials decreased from 67 last year to 40 this year.
Overall, ending primary delinquent inventory decreased 20.3% from last year’s 64,805 loans to 51,642 in August this year.
That being said, even though delinquencies are going down, consumers felt slightly less optimistic about the economy in August than they did in July, but were still more confident than August 2015, according to Fannie Mae’s Home Purchase Sentiment Index.
