SHORT INTEREST UP FOUR(4) X TO 16.04 MILLION ON UNCERTAINTY
EVEN THOUGH, the real estate prices are peaking, uncertainties in the PRIVATE MORTGAGE INSURANCE ENVIROMENT is sending short interest staightup.
WHile MGIC INVESTMENT increased 10% in the latest period ending February 15, RADIAN was up 34%.
Based on what I read, these are the elements increasing risk:
1) Some Investment managers see inflation in housing and the affordability index is declining. Reason is, 7% y/o/y increases in US REAL ESTATE PRICES is racing past potential buyers income levels, putting potential on the sidelines.
Interest rates have been increasing for several months now, causing potential HOME BUYERS payments to disqualify their eligibility.
2) No one seems to know why FHA DELINQUENCY rate soared to 9% in Q4 2016. However, usually when people start skipping mortgage payments, either homeowners debt load exceeds debts, then delinquencies occur.
Or, some borrowers could have lost their jobs. Conceivably, there could be a pocket of recession in a particular industry and analysts have not identified the weak industry in the economy and, it's being masked by higher employment in other strong industries.
3) THE increase in foreclosures of 18% or, 70K in January 2017 could be a manifestation of the high delinquencies in Q4 2016 and lenders were moving fast to mitigate those REL loans while the markets are hot and, they can get the most money from the sale of the real estate collateral.
We'll continue surveillance on macroeconomic conditions and microeconomics too and, report back here.
