The Federal Reserve Bank of New York’s Center for Microeconomic Data indicated that Q1 2019 generated the lowest dollar amount of mortgage originations in any quarter since Q3 2014. Down from $401B in Q4 2018, mortgage originations in Q1 2019 totaled just $344B.

To visually emphasize the drop in mortgage originations, take a look…

  • Q3 2018 posted $441B
  • Q4 2018 posted $401B
  • Q1 2019 posted $344B

According to this Federal Reserve report, mortgage underwriting “remained tight” in Q1 2019. The median credit score was 759 with only 10% of mortgages originated going to borrowers with credit scores under 647.

Mortgage delinquencies and mortgage performance both improved. Just 11.7% of mortgages in early delinquency (30-60 days late) moved on to 90+ days delinquent, the lowest rate since 2005.

Overall, household debt continued to rise for the 19th consecutive quarter to $13.67T, more than the previous peak of $12.68T in Q3 2008.

One way to “open up” the currently” tight” mortgage system to more people was suggested in a recent article in the Washington Post co-authored by Gary Acosta, CEO of the National Association of Hispanic Real Estate Professionals, Jim Parrott, nonresident fellow at the Urban Institute and Mark Zandi, chief economist with Moody’s Analytics.

Their article stated,” The face of America is changing and the housing market is changing along with it. If the mortgage market doesn’t keep up, the nation’s economy will bear the consequences…The face of America is changing,” means that by 2045, people of color will make up +50% of the US population and by 2045, more than 50% of households will be Hispanic American households.”

The authors suggested that mortgage underwriters and regulators factor in realities such as Hispanics living with extended family members who contribute to expenses, family members who are self employed, family members who use cash more than credit cards…factors that hurt the status of family members in the underwriting process.

Their remedy? “…include more sources of income and more ways of paying bills…” Then, perhaps, more than 47% of Hispanics would become homeowners compared with the non-Hispanic homeownership rate of almost 68% and then, perhaps the mortgage business would turn around this seemingly consistent drop in mortgage originations.