U.S. Mortgage Insurers: Strong Performance Amid High Mortgage Rates and Housing Affordability Challenges

Morningstar DBRS published a commentary discussing the U.S. private mortgage insurers' performance in recent years and potential implications of the new Trump administration.

Key highlights include the following:
-- High mortgage rates have constrained growth in new policies while keeping existing insurance policies in force for longer, resulting in net growth in insurance in force.
-- The U.S. mortgage insurers' earnings are further supported by the strong labor market, solid borrower credit profiles, and high housing prices despite the rising housing affordability challenges.
-- The new Trump administration may cause a shift in economic landscape that will affect the mortgage financing industry over time; however, we expect little disruption to the USMI industry in the near term.

"The U.S. mortgage insurers have reported solid revenues and good underwriting incomes supported by high persistency rates and low loss ratios in recent years," said Steve Liu, Assistant Vice President, Global Insurance & Pension Ratings. "Looking ahead, under the new Trump administration, the USMI industry may face a mix of long-term uncertainties from tariffs and their ultimate impact on unemployment, housing policies, and mortgage rates; nonetheless, we do not expect the landscape to change in the near term."