Fitch Ratings: Mortgage Insurer Ratings Reflect Strong Borrower Credit Performance

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Fitch Ratings, New York, said underwriting results for U.S. mortgage insurers remained very strong through 2023.

“Current-year loss activity continued to be offset by highly favorable reserve development,” Fitch Ratings said in a new report, U.S. Mortgage Insurer Results Reflect Strong Borrower Credit Performance. “Results benefited from low unemployment and strong household balance sheets, despite current interest rates continuing to challenge home affordability.”

The report found that average persistency across U.S. mortgage insurers increased to 85% at year-end 2023, more than offsetting a reduction in origination activity and new insurance written last year. This lead to 3% growth of insurance in force. “Fitch expects growth in insurance in force in 2024 to be supported by persistency remaining elevated and the size of new insurance written remaining in line with 2023,” the report said.

“We expect private mortgage insurer eligibility requirement sufficiency across the sector to remain robust, with strong results driving capital generation and relative economic uncertainty in 2024 generally leading to maintained levels of conservatism,” Fitch said.