Las Vegas Mortgage Default Risk Remains Below US Average

Posted on by & filed under Nevada by the Numbers Blog.

Good news! The latest update from UCLA’s Ziman Center for Real Estate shows Las Vegas in good shape on their Mortgage Default Risk Index (MDRI).

The MDRI captures real-time household mortgage default risk by aggregating internet search queries such as “foreclosure help” and “mortgage help”. Chauvet, Gabriel, and Lutz (2016) find that the MDRI is a leading indicator of traditional measures of mortgage default risk. 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:

While Las Vegas was one of the cities identified as most at risk of widespread defaults in December 2007, the city’s MDRI is now below 2004 levels, when the index was first developed. Also, starting in about 2013 the index for Las Vegas actually fell below the national average – while this was in some ways a natural result of those at risk going through foreclosure or short sale, the continued low levels of the index indicate the housing market has a stronger foundation as it recovers.

US Mortgage Default Risk (the MDRI) has decreased 13.98% over the last 12 months.