In its latest National Mortgage Risk Index, the American Enterprise Institute's International Center on Housing Risk estimated that 11.8 percent of agency purchase loans would be at risk of default should the economy see another crisis in the near future. December's index, which saw about 215,000 new loans added to the pool of risk-rated mortgages, was up close to half a percentage point from the average for the prior three months and more than 1 point from a year earlier.
As ever, the largest portion of risk came from the Federal Housing Administration, which had a risk index of 24.3 percent, up from the prior three-month average. Following that were the Veterans Affairs index, which was at 11 and a half percent, and the Fannie/Freddie index, which was 6.2 percent, just above the 6 percent threshold AEI says is quote--indicative of conditions conducive to a stable market.
The Commerce Department estimated Tuesday that new home sales in December were at a seasonally adjusted annual rate of 48,000, a jump of more than 11 percent from November's downwardly revised sales rate of 431,000. While December's report showed a solid increase, the month's activity did little to lift overall new home sales for the year. Throughout all of 2014, the government estimates new home sales came in at 435,000, up just 1.2 percent from 2013 as poor numbers in spring and early summer took a toll.