Mortgage Default Risk Index (MDRI)

Quarterly Releases - 2017

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Q1 - Mortgage Default Risk Index Shows Default Risk at All Time Lows

The Mortgage Default Risk Index (MDRI) shows that U.S. Household Mortgage Default Risk decreased 14 percent over the last year with cities across the U.S. hitting post-recession lows. Declines in Household Mortgage Default Risk have been largest in Miami, Dallas, and Chicago. The overall low levels of Mortgage Default Risk highlight the strength of the U.S. housing and labor markets as the current economic expansion continues into its 8th year.

What is MDRI?


Real-time, Google search-based mortgage default index

The MDRI - Mortgage Default Risk Index - is a unique search query-based index of mortgage default risk in key U.S. housing markets. Using extensive real-time and broad-based data from Google, the MDRI compiles information from Internet search query for terms such as "foreclosure help" and "government mortgage assistance" to formulate the index.  The MDRI uses a much larger number of observations than traditional indexes and accordingly can be estimated for many metropolitan areas and at high frequencies.  The ability of the MDRI to predict such outcomes as housing returns, mortgage delinquencies, and subprime credit default swaps has been demonstrated in peer-reviewed academic research (see, "Mortgage Default Risk: New Evidence from Internet Search Queries", Journal of Urban Economics, Volume 96, November 2016, Pages 91-111).

The MDRI is updated regularly and published by the UCLA Ziman Center for Real Estate in the UCLA Anderson School of Management. It was developed by Professors Marcelle Chauvet, Stuart Gabriel, and Chandler Lutz.

Market Snapshot of 20 Cities


MDRI Performance During the Great Recession

At the peak of the business cycle in December 2007, the MDRI identified San Diego, Las Vegas, Los Angeles, and Phoenix as the cities most at-risk of experiencing widespread mortgage defaults. Below is a table that ranks the 20 Case-Shiller by growth in their Mortgage Default Risk Index (MDRI) from January 2006 to December 2007:

Rank City
1 San Diego
2 Detroit
3 Phoenix
4 Los Angeles
5 Miami
6 San Francisco
7 Denver
Rank City
8 New York
9 Tampa
10 Cleveland
11 Washington DC
12 Minneapolis
13 Chicago
14 Boston
Rank City
15 Las Vegas
16 Atlanta
17 Seattle
18 Dallas
19 Charlotte
20 Portland