But what happens around us is of consequence. And so when we look at those items in balance, we do still see the potential for volatility on the horizon from a macroeconomic standpoint, and that’s what we’re concerned about.
Arren Cyganovich: That’s helpful. And then just secondarily, the persistency rate inched up a bit higher. What do you think that in this kind of rate environment would be like the maximum? Is it getting kind of close to wherever that maximum would be on the persistency level?
Ravi Mallela: Arren, it’s a good question. I think I mentioned during the call that we reached 86% in Q2, up from 85.1% in Q1. And look, we expect it to remain well above historical trend through year-end. And we might see some modest improvement going forward. But I think the way to think about it is that it’s probably going to be naturally a little bit more muted over time. We’ve just seen it increase just so much, and there just is as we go through our portfolio, a minimum level of turnover that’s going to occur. And we’re going to start to see some of our portfolio, our most recent vintages hitting points of time and cancellation. And as a result, we’re probably going to see some modest improvement going forward, but it’s going to be muted over the course of the year. But it’s still well above historical trends, and we’re benefiting significantly from the high persistency.
Operator: Our next question will come from Rick Shane with JPMorgan.
Richard Shane: I’d like to talk a little bit about the unusual environment that we’re in, the puts and takes for MI penetration in the context of overall mortgage volume. On one hand, we’re hearing that cash buyers have huge advantages in this market. But that’s obviously not normally the — they would not normally be competition for your customers. I’m wondering if you’re seeing any substitution in that market. And at the same time, on the other hand, robust pricing for starter homes presumably is driving increased demand. I’m kind of curious how you balance that.
Adam Pollitzer: Yes, Rick, it’s a great set of questions. And I may actually broaden it to just talk generally about where we see origination activity developing and the opportunities that we have, both in the near term and over the longer term to support borrowers and help them gain access to their homes. When we spoke last May, we shared our expectation that we would see a total purchase origination market of roughly $1.3 trillion for the year. And so I think the starting point, right, to preface your question is, we’re actually still seeing notwithstanding the fact that there are headlines around affordability that rates remain elevated, we’re seeing a really constructive purchase environment. And even though it sits behind the record levels that we saw what I’ll call the pandemic years, by historical standards, it’s a very large purchase market.
And within that, we’re seeing a tremendous opportunity to write new business. We’ve guided through the course of this year that we expect to see a total private MI market of, give or take, $300 billion. And that remains the case. The first half of the year has come in generally in line with our expectations. Our outlook remains the same today. And so, look, there are buyers out there who will transact. They need MI support and over the long term, not just through 2023, but over the long term, there are a number of fundamental drivers of both purchase volume as well as MI demand that we see sustaining our market opportunity. And so we haven’t seen a shift because of maybe the rise and increasing advantage that cash buyers have or penetration rates, otherwise, it’s a very large market that’s coming in line with our expectations and it gives us increased confidence as we think about the long-term opportunity.
Operator: Our next question will come from Mark Hughes with Truist.
