Key Forecast Metrics

Bernard Nossuli -

iEmergent forecasts include a variety of metrics that quantify the opportunity in specific mortgage markets and describe the behavior within those markets to help lenders create market-based and market-driven strategies that are successful over time.  Some iEmergent metrics include:

Purchase Mortgage Opportunity Totals - The projected number of all purchase loans and dollars originated in a particular market for a given year, including single-family 1-4 property types.  Excludes loans on manufactured housing, co-operatives, and home improvement loans.

Purchase Average Loan Size (PALS) - The Purchase Average Loan Size is calculated for each forecasted year.  Although related to the average home prices in a market, PALS are preferable to Home Price Indexes because they quantify the opportunity for lenders, as opposed to looking at all real estate transactions, which include cash transactions.

Purchase Mortgage Generation Rate (PMGR) - The percentage at which a market creates purchase mortgages in a year. The PMGR is one of the key drivers of the forecast methodology, as it encapsulates many independent data variables, including unemployment, household growth, net household migration, world and national economics, and many other demographic and housing indicators.

Mortgage Velocity Index (MVI) - The rate of growth of mortgage loans in a market over the next five years.  The MVI is used to easily understand how quickly one market is growing in loan units compared to the U.S. purchase market over the same five years.

Mortgage Opportunity Index (MOI) - The rate of growth of mortgage dollars in a market over the next five years.  The MOI is used to easily understand how quickly one market is growing in loan dollars compared to the U.S. purchase market over the same five years.

Purchase Mortgage Density of Loans (PMD - Loans) - The density of purchase loans generated per 1,000 homeowners in a market each year.  This metric allows for easy comparison among geographies of different sizes.

Competitive Landscape Metrics - Compare the competitive landscape across markets:

  • Loan-to-Lender Ratio: This most basic competitive metric quantifies the number of all purchase loans per lender in each market.  The data source is the most recently released HMDA Loan Application Record (LAR) database.
  • Lender Concentration Score: This metric clarifies how much of a market's originations are controlled by the top lenders, specifically what percentage share of the market is controlled by the Top 5 lenders.
  • Top 5 Threshold: This metric clarifies the percentage share a lender would need to be in the Top lenders in that market.

Refinance Range - Refinance activity is highly volatile and far less predictable than purchase mortgage behavior.  Therefore, we provide a projected range for refinance units and dollars that we believe accurately provides the low and how projections for the current year and the following year.

Our clients are able to access most of this information directly through the data grid in Mortgage MarketSmart.  However, there are a few key datasets that we send in an Excel file directly to our clients:

  • Loans by Lender Summary:  A comprehensive table that includes the origination totals and market share for each lender by county, and summarizes the Top 50 lenders for each county.  This table is available for HMDA years 2010-2013 and can be provided for different segments (e.g., FHA, VA, CRA, etc.)
  • Market Goals and Resources Calculator: This file allows clients to identify appropriate market share goals and the appropriate coverage necessary to reach them.

 

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