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 A. Gabriel, and Chandler Lutz.

2019

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Q1 - Mortgage Default Risk Stays Low with Strong Labor Markets

U.S. mortgage default risk as measured by the Mortgage Default Risk Index (MDRI) remains at all-time lows despite recent dampened house price growth: Households are benefiting from low unemployment and a strong labor market as well as lower debt, relative to home prices, compared to the 2000s boom and bust.

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Q2 - Increasing Wages and Employment Keep Mortgage Default Risk Low

U.S. Mortgage Default Risk as measured by the Mortgage Default Risk Index continued to remain at historic lows as increasing employment, higher wages, and declines in interest rates have buttressed borrowers’ ability to repay mortgage debt. These trends are likely to continue during this low interest rate, high employment growth environment.

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Q3 - Low Mortgage Default Risk Levels Continue Alongside Solid Economic Fundamentals

The Mortgage Default Risk Index (MDRI) remains at the lower end of its historical range, corresponding to the lowest levels of mortgage defaults and foreclosures since the Great Recession. Overall, strong labor markets and domestic fundamentals, even in the face of rising trade tensions and slower global growth, have contributed to households' ability to repay mortgage debt, especially as many borrowers have locked in historically low interest rates.

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Q4 - U.S. Mortgage Default Risk Remains Low with Strong Labor Markets

As unemployment has fallen to historic lows, the U.S. Mortgage Default Risk Index (MDRI) has stayed at the low end of its range, signaling limited risk of borrower default among U.S. households. Geographically across U.S. cities, mortgage default risk as measured by the MDRI also is limited.

2018

2017

What is MDRI?

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

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
8 New York
9 Tampa
10 Cleveland
Rank City
11 Washington DC
12 Minneapolis
13 Chicago
14 Boston
15 Las Vegas
16 Atlanta
17 Seattle
18 Dallas
19 Charlotte
20 Portland
SOURCE: HTTPS://CHANDLERLUTZ.SHINYAPPS.IO/MDRI-APP/