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Oregon Mortgage Market Conditions
One test for the health of the Portland metro real estate market is the mix of sub-prime vs. traditional (or prime) mortgages. In a recent National Association of Realtors survey, subprime loans account for only 9% of homeowner mortgages, but they comprise 54% of foreclosures nationally.
The survey, which includes data from the Mortgage Brokers Association, reports that as of early 2008, 32% of homeowners across the U.S. have their homes paid in full, and of those with a home loan, 53% are in a prime mortgage and the balance are in a sub-prime (9%) or FHA/VA loan (6%).
Here’s a look at how Oregon compares to the nation and California by mortgage type:
Mortgage Mix
| Mortgage Type | National | California | Oregon |
| Paid in full |
32%
|
24%
|
29%
|
| Prime mortgage |
53%
|
65%
|
60%
|
| Subprime mortgage |
9%
|
10%
|
7%
|
| FHA/VA mortgage |
6%
|
1%
|
4%
|
Foreclosure Mix by Mortgage Type
NAR says the Oregon foreclosure rate is 0.7%, while California foreclosure rate is at 2.2%. Here are the mortgage types that foreclosures are coming from:
| Mortgage Type | National | California | Oregon |
| Subprime Mortgages |
54%
|
61%
|
55%
|
| Prime mortgage |
37%
|
38%
|
38%
|
| FHA/VA mortgage |
9%
|
1%
|
7%
|
Does this mean Oregon will continue to outperform national and Californian averages? Maybe, maybe not. But certainly the mix of mortgage products is encouraging.
Source: 2008 State-by-State “Mortgage Market Conditions” Reports, NAR.
Photo by denn, used under Creative Commons license.
Comments
3 Responses to “Oregon Mortgage Market Conditions”
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http://www.housingwire.com/2008/04/24/moodys-begins-downgrading-aaa-rated-alt-a-rmbs-to-junk/
I really don’t think we need to differentiate too much between Alt-A and subprime any more – the Alt-A is just taking a little longer to go south as those people typically have more reserves to survive longer – but the end result will be the same.
Once the write downs in Alt-A start we’ll see the credit market for near prime lending tighten in the same way as we saw subprime vanish.
It’s still early days in this credit crunch IMHO – the losses on mortgages going south will be larger going forwards as home prices are dropping daily – and the losses on the alt-a stuff will be significantly larger than the subprime stuff as the loan amounts were higher.
More blood incoming for the banks this summer/fall I suspect.
http://www.youtube.com/watch?v=pmeBSWI9sF8
This is a good primer and comparison between Alt-A and subprime.
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