The Data & Analytics division of Black Knight Financial Services has introduced the Black Knight Index Suite, a series of indices designed to provide insights into the housing and mortgage markets with comprehensive depth, coverage and currency, the company announced in a release.
Based upon Black Knight’s vast property and mortgage datasets, and using modeling and analytics techniques refined over 20 years, the Black Knight Index Suite expands upon the company’s existing Home Price Index (HPI) by adding three new indices that include the Mortgage Market Index, Housing Market Index and a Home Listing Index.
As explained by Julian Grey, mortgage market leader for Black Knight’s Data & Analytics division, the Index Suite has been designed to provide objective and robust benchmarks for measuring housing and mortgage market performance, the release said.
The suite’s rich collection of indices can provide useful tools for economic forecasting, decision-making, risk management, research and modeling, as well as a wide range of other applications:
- Black Knight Index Suite expands upon the company’s Home Price Index with a series of indices designed to provide insights into the housing and mortgage markets with unmatched depth, coverage and currency;
- Consolidates Black Knight’s comprehensive proprietary data and cutting-edge analytics;
- Designed to provide objective and robust benchmarks for measuring housing and mortgage market performance; and
- Comprised of two sub-series: a Mortgage Market Index Series and a Housing Market Index Series.
“Developing the Index Suite was a natural, logical progression for Black Knight,” Grey said. “HPIs have long served as valid analytic proxies for gauging the value of real property in a given geography, and today, they’re widely used as an acceptable alternative to AVMs for marking portfolios to market. The beauty of an HPI is that it takes vast amounts of data and presents it in a very simple, easy-to-digest-and-process form. We sought to take a page from that proven HPI model and put it to work in other data-heavy aspects of the industry.”
The Black Knight Index Suite is comprised of two sub-series: a Mortgage Market Index Series and a Housing Market Index Series. The Mortgage Market Index Series tracks changes in portfolio risk profiles via Mortgage Origination and Mortgage Performance Indices, each consisting of monthly time series measuring market and mortgage performance over the life cycle of a group of loans.
The Mortgage Market Index Series is believed to be the first of its kind available on the market to provide thorough mortgage performance analysis based on geographical, cohort-level risks.
The Housing Market Indices include both an enhanced version of the Black Knight HPI and a forthcoming Home Listing Index (HLI). The enhanced HPI now includes support for 3-digit ZIP codes – the first three digits of a standard 5-digit ZIP code -- for easier matching with Credit Risk Transfer data and Freddie Mac and Fannie Mae single-family mortgage performance data.
“Countless decisions are based upon assumptions around home prices, market ‘heat,’ origination volumes and prepayment and default activity,” Grey said. “Vast personnel, time and capital resources have been expended answering some very core questions related to these assumptions. The Black Knight Index Suite eliminates a lot of that work, making analysts far more efficient and helping decision-makers across the enterprise base conclusions upon the collective intelligence of many terabytes of raw data – with trusted analytics making sense of it all.