
The Kobeissi Letter|Mar 16, 2025 15:27
What is happening here?
A record 64.5% of new FHA borrowers had debt-to-income ratio above 43.0% in 2024.
The share has risen by 10 percentage points over the last 5 years.
To put this into perspective, in 2007, this percentage was nearly half of what it is now, at ~35%.
In other words, the FHA loan portfolio is significantly more risky than it was before the 2008 Financial Crisis.
Meanwhile, ~7.05% of FHA mortgages issued in 2024 went seriously delinquent, above the 2008 peak of 7.02%.
Are we in a subprime housing bubble?
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