powerpoint presentation · 2019-11-01 · case shiller 07/2019 s&p case shiller. 7/2019...

JULY 2019

By Region

07/2019 FHFA

Actual Year-Over-Year % Change in Price

07/2019 FHFA

Actual Year-Over-Year % Change in Price

6.5%

6.2%6.0%

5.7%5.5%

5.3%5.2%

4.1%

3.5%

3.0%

3.7%3.5%

May Jun Jul Aug Sep Oct Nov Dec Jan 2019 Feb Mar April

Year-Over-Year PRICE CHANGES20 City Composite

Case Shiller

07/2019 S&P Case Shiller

7/2019 CoreLogic

Actual Year-Over-Year % Change in Price

Year-Over-Year % Change in Price

7/2019 CoreLogic

3.6%

5.6%

Current Forecast

CoreLogic

3.6%

4.7%

5.6%

May June July

CoreLogic’s 12 Month Price Forecast

A nationwide panel of over one hundred

economists, real estate experts and investment

& market strategists.

Expectation Home Price

Survey

27.7%

16.8%

6.7%

Bulls All Projections Bears

Cumulative House Appreciation

by 2023

2019 Q2 Home Price Expectation Survey

4.1

2.82.5

3.03.4

2019 2020 2021 2022 2023

PROJECTEDMean Percentage Appreciation

2019 Q2 Home Price Expectation Survey

Source 2019 2020 2021 2022

Home Price Expectation Survey +4.1 +2.8 +2.5 +3.0

Mortgage Bankers Association +4.7 +3.5 +2.6 N/A

Zelman & Assoc. +3.5 +3.2 N/A N/A

Freddie Mac +3.6 +2.7 N/A N/A

National Association of Realtors +2.8 +3.2 N/A N/A

Fannie Mae +4.6 +2.9 N/A N/A

Projected Home Price % Appreciation Going Forward

07/2019

Realtor.org

Increase in Home Values 2005-2018

07/2019 Housing & Mortgage Market Review

The Probability of Home Prices Being Lower in 2 Years

62

70

74

65

7469

Bottom Third Income Group Middle Third Income Group Upper Third Income Group

Historically

2019

How Optimistic are Americans regarding FUTURE PRICE APPRECIATION?

Z Report

Optimism Index

11.3%

20.8%

7.8%6.3%

All Homes Starter Homes Move-Up Homes High-End Homes

CoreLogic

Percentage Share of INVESTOR Purchases

“Investor buying activity in the U.S. is at record highs. And our records go back confidently, about 20 years…

What’s going on and why? Well, it turns out, it’s not the big institutional guys that are leading the increase in home buying. It’s actually the smaller guys. It’s those that have bought between one and ten properties over this 20 year period, they’re the ones that are really leading the increase in investor home buying.”

Ralph McLaughlinDeputy Chief Economist at CoreLogic

Investor Purchases by Type of Investor

CoreLogic

48%

61.6%

27.7%

22.7%

24.3%

15.8%

2013 2014 2015 2016 2017 2018

"Mom & Pop"(1-10)

Professional(11-100)

Institutional(>100)

# of Purchases over last 20 Years

Mark FlemingChief Economist at First American

“Title agents & real estate professionals indicate home buyers encouraged by unexpectedly lower mortgage rates in 2019 – a tailwind helping to boost demand and inspire existing homeowners to sell their homes.”

07/2019 NAR

Seller Traffic

4.54% 4.54%

4.75%

4.41%

3.73%*

3.00%

3.20%

3.40%

3.60%

3.80%

4.00%

4.20%

4.40%

4.60%

4.80%

5.00%

June 2018 September 2018 December 2018 March 2019 July 2019

Freddie Mac

30 Year Fixed-Rate Mortgage Rate *The lowest rate

in three years

ResourcesSlide Slide Title Link

3, 4 FHFA % Change in Price https://www.fhfa.gov/DataTools/Tools/Pages/House-Price-Index-(HPI).aspx

5Case Shiller Y-O-Y Price Changes 20 City Composite

http://us.spindices.com/indices/real-estate/sp-case-shiller-20-city-composite-home-price-index

6-8 CoreLogic % Change in Price https://www.corelogic.com/insights-download/home-price-index.aspx

9-11 Home Price Expectation Survey https://pulsenomics.com/surveys/#home-price-expectations

12Projected Home Price % Appreciation Going Forward

www.freddiemac.com; www.fanniemae.com; www.nar.realtor/, www.pulsenomics.com; www.mba.org; www.zelmanassociates.com (subscription required); www.wsj.com (subscription required)

13 Increase in Home Values 2005-2018 https://www.nar.realtor/economists-outlook/property-values-by-state-from-2005-2018

14The Probability of Home Prices Being Lower in 2 Years

https://mi.archcapgroup.com/hammr

15, 26 Future Price Appreciation www.zelmanassociates.com (subscription required)

16, 18 % Share of Investors, Type of Investor https://www.corelogic.com/blog/2019/06/special-report-investor-home-buying.aspx

17 Ralph McLaughlin Quote At NAREE Conference

19 Mark Fleming Quotehttps://blog.firstam.com/economics/the-unexpected-surprise-boosting-demand-and-supply-in-2019

20 Seller Traffic https://www.nar.realtor/reports/realtors-confidence-index

21 30 Year Fixed Mortgage Rate www.freddiemac.com

23 Danielle Hale Quote https://news.move.com/2019-06-06-Homes-Becoming-More-Affordable-Despite-Rising-Prices

24 Ralph McLaughlin Quote https://themortgagereports.com/50482/home-price-growth-is-slowing-but-maybe-not-for-long

25 Sam Khater Quote https://freddiemac.gcs-web.com/node/17016/pdf

KEEPINGCURRENTMATTERS.COM

“Lower mortgage rates, higher wages and more homes for sale have helped counteract rising home prices, and ultimately, made it so that buyers are able to afford more than last year.”

Danielle Hale realtor.com’s Chief Economist

Ralph McLaughlinDeputy Chief Economist at CoreLogic

“With mortgage rates flat and inventory picking up, we expect more buyers to take advantage of easing housing market headwinds.”

Sam KhaterChief Economist at Freddie Mac

“The drop in mortgage rates over the last two months is already being felt in the housing market…In the near-term, we expect the housing market to continue to improve from both a sales and price perspective.”

“Key metrics tracking existing home sales demand have been on an upward trajectory so far in 2019...This portends positively for our forecast for existing home closings to increase 1% in 2019, despite a 3% decline through the first five months of the year. Our outlook implies 4% growth for the remaining months of the year, predicated on…more supply than last year, the decline in mortgage rates, moderating home price appreciation and improving affordability.”

‘Z’ Report

ResourcesSlide Slide Title Link

30, 51, 64Days on the Market, Seller Traffic, Buyer Traffic

https://www.nar.realtor/reports/realtors-confidence-index

33 -38, 41, 58, 59

Home Sales (Existing, Pending, New, Total, Distressed Property, Inventory, Supply)

http://www.census.gov/construction/nrs/pdf/newressales.pdfhttp://www.census.gov/newhomesaleshttp://www.census.gov/construction/nrs/pdf/newressales.pdf

31 -33, 44, 52, 53 - 57

Existing Home Sales, YOY Sales, % Change in Sales, Inventory, YOY Inventory, Supply

https://www.nar.realtor/topics/existing-home-sales

39, 40 Pending Home Sales, YOY Sales, https://www.nar.realtor/research-and-statistics/housing-statistics/pending-home-sales

43, 44Existing Home Prices, % Change by Price Range

https://www.nar.realtor/topics/existing-home-sales

45 - 47 Case Shiller Home Price Index http://us.spindices.com/indices/real-estate/sp-case-shiller-20-city-composite-home-price-index

48 CoreLogic Home Price Insights http://www.corelogic.com/about-us/researchtrends/corelogic-home-price-insights.aspx

49 Appraiser Home Value Opinionshttps://www.quickenloans.com/press-room/2019/05/14/average-appraisal-values-make-largest-monthly-jump-in-more-than-four-years-according-to-quicken-loans-study/

61-63 Foot Traffic http://nar.realtor/infographics/foot-traffic

66, 67, 69 Mortgage Rateshttp://www.freddiemac.com/pmmshttp://www.freddiemac.com/research/forecast/20190515_steady_growth.pagehttps://www.nar.realtor/sites/default/files/documents/forecast-05-2019-us-economic-outlook-04-30-2019.pdf

72, 73 Mortgage Credit Availability Index https://www.mba.org/news-research-and-resources/newsroom

74-78 FICO Scores, Days to Close, Average DTI http://www.elliemae.com/resources/origination-insight-reports

KEEPINGCURRENTMATTERS.COM

Average Days on the Market

07/2019 NAR

Jan 2014 Jan 2015 Jan 2016 Jan 2017 Jan 2018 Jan 2019

Since January 2014

EXISTINGHome Sales

NAR 7/2019

-1.1%

0.0%

-3.9%

-1.3%

-3.4%

U.S. Midwest South West

Y-O-Y by Region

EXISTING Home Sales

NAR 7/2019

Northeast

Existing Home Sales in thousands

Census & NAR

January February March April May June July August September October November December

2017 2018 2019

Census & NAR

January February March April May June July August September October November December

2017 2018 2019

New Home Sales in thousands

Jun-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19

Census 7/19

New Home Salesannualized in thousands

2%

5%

22%

14%

8%6%

4%

Under $150K $150-$199K $200-299K $300-$399K $400-$499K $500-$749K Over $750K

New Home Sales% of sales by price range

Census 7/19

2.92.8

3.13.2 3.2

3.4

3.23.3

3.7

3.93.8

3.7

3.3

3.1

2.9 2.9

2.7

3.0

3.2 3.2

3.63.5

3.33.4

Jun Jul Aug Sep Oct Nov Dec Jan-18 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan-19 Feb Mar Apr May

New Homes Selling Fast(median months from completion to sold)

Census 7/19

Census & NAR

361 373

500521

597626

575 586

467489

450

415

334

368

472

522

600

January February March April May June July August September October November December

2018 2019

Total Home Sales in thousands

January… January… January… January… January… January…

100 = Historically Healthy Level

PENDING Home Salessince 2014

NAR 7/2019

-0.7% -0.5%

-1.2%

0.7%

-3.1%

U.S. Midwest West

Pending Home SalesYear-Over-Year By Region

NAR 7/2019

Northeast

South

Jan 2012 Jan 2013 Jan 2014 Jan 2015 Jan 2016 Jan 2017 Jan 2018 Jan 2019

Percentage ofDistressed Property Sales

35%

January 2012 - Today2%

4%

NAR 7/2019

Home Prices

4.8%

6.6%

5.6%

3.6%4.1%

Y-O-Y by Region

EXISTING Home Prices

NAR 7/2019

-12.4%

0.1%

10.5%11.5%

8.1%

2.3%

$0-100K $100-250K $250-500K $500-750K $750K-1M $1M+

% -12.4% 0.1% 10.5% 11.5% 8.1% 2.3%

% Change in Salesfrom last year by Price Range

NAR 7/2019

Year-Over-Year

PRICECHANGES

Case Shiller

S&P Case Shiller 7/2019

Jun 2012 Jan 2013 Jan 2014 Jan 2015 Jan 2016 Jan 2017 Jan 2018 Jan 2019

Year-Over-Year PRICE CHANGES20 City Composite

Case Shiller

S&P Case Shiller 7/2019

6.5%

6.2%6.0%

5.7%5.5%

5.3%5.2%

4.1%

3.5%

3.0%

3.7%3.5%

May Jun Jul Aug Sep Oct Nov Dec Jan 2019 Feb Mar April

Year-Over-Year PRICE CHANGES20 City Composite

Case Shiller

S&P Case Shiller 7/2019

Year-Over-Year % Change in Price

7/2019 CoreLogic

3.6%

5.6%

Current Forecast

Appraiser Home Value Opinions Compared to Homeowner Estimates

Last 12 Months

-0.25-0.28 -0.28 -0.29 -0.28

-0.36

-0.45-0.47

-0.50

-0.78

-0.87

-0.79

Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May June

% -0.25 -0.28 -0.28 -0.29 -0.28 -0.36 -0.45 -0.47 -0.5 -0.78 -0.87 -0.79

Quicken Loans 7/19

HOUSINGINVENTORY

07/2019 NAR

Seller Traffic

January 2011

January 2012

January 2013

January 2014

January 2015

January 2016

January 2017

January 2018

January 2019

Months Inventory ofHOMES FOR SALE

2011 - Today

NAR 7/2019

May Jun Jul Aug Sep Oct Nov Dec Jan-18 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan-19 Feb Mar Apr May

Months Inventory of HOMES FOR SALE

last 2 years

NAR 7/2019

4.3 4.3 4.3

4.4

4.3

4.0

3.7

3.9

3.6

3.8

4.2

4.3

Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May

NAR 7/2019

Months Inventory of HOMES FOR SALELast 12 Months

January 2014 January 2015 January 2016 January 2017 January 2018 January 2019

% 7.3 5.3 3.2 6.5 6.0 5.5 5.8 4.5 6.0 5.2 5.0 -0. -0. -0. 2.0 -0. 1.8 0.4 -4. -1. -3. -4. -1. -3. -2. -1. -1. -3. -9. -5. -5. -10 -6. -10 -9. -6. -7. -6. -6. -9. -8. -7. -9. -6. -6. -10 -9. -11 -9. -8. -7. -6. -6. 0.5 0.0 2.7 1.1 2.8 4.2 6.2 4.6 2.9 2.4 1.7 2.7

Year-Over-Year Inventory Levels

NAR 7/2019

Year-Over-Year Inventory Levels

NAR 7/2019

HOUSING SUPPLY Year-Over-Year

0.5%0.0%

2.7%

1.1%

2.8%

4.2%

6.2%

4.6%

2.9%2.4%

1.9%2.7%

Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May

NAR 7/2019

Last 12 Months

Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May

5.65.4

5.3

5.75.6

6.06.2

6.36.4

7.2

6.5

7.4

6.5

6.1

5.75.9

6.4

Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec

2018 2019

New Home Inventorymonths supply

Census 7/19

6.06.2 6.3 6.4

7.2

6.5

7.4

6.5

6.1

5.75.9

6.4

Jun Jul Aug Sep Oct Nov Dec Jan-19 Feb Mar Apr May

New Home Inventory months supply

Last 12 Months

Census 7/19

BUYERDEMAND

Jul 2013 Jan 2014 Jan 2015 Jan 2016 Jan 2017 Jan 2018 Jan 2019

Foot Trafficindicator of future sales

NAR 7/2019

Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May

Foot Trafficindicator of future sales

Last 12 Months

NAR 7/2019

January February March April May June July August September October November December

2018

2019

Foot Trafficindicator of future sales

NAR 7/2019

07/2019 NAR

Buyer Traffic

INTERESTRATES

1/4 2/1 3/1 4/5 5/3 6/7 7/5 8/2 9/6 10/4 11/1 12/6 1/3 1/31 3/7 4/4 5/2 6/6Freddie Mac 7/2019

Mortgage RatesFreddie Mac 30-Year Fixed Rate

3.95%

3.73%

1/7/

16

2/4

3/3

4/7

5/5

6/2

7/7

8/4

9/1

10/6

11/3

12/1

1/5/

20

…

2/2

3/2

3/3

0

4/27

5/2

5

6/2

2

7/2

0

8/1

7

9/1

4

10/1

2

11/9

12/7

1/4/

20

…

2/1

3/1

4/5

5/4

6/7

7/5

8/2

9/6

10/4

11/1

12/6

1/3

1/3

1

3/7

4/4

5/2

6/6

30-Year FixedRate Mortgages

from Freddie Mac

3.73

3.97

Freddie Mac 7/2019

Mortgage Rate Projections

7/2019

QuarterFreddie

MacFannie Mae

MBA NARAverage

of All Four

2019 3Q 4.0 3.9 3.9 3.9 3.92%

2019 4Q 4.0 3.9 4.0 3.9 3.95%

2020 1Q 4.1 3.8 4.0 4.0 3.97%

2020 2Q 4.1 3.8 4.0 4.1 4.0%

2016Q1

2016Q2

2016Q3

2016Q4

2017Q1

2017Q2

2017Q3

2017Q4

2018Q1

2018Q2

2018Q3

2018Q4

2019Q1

2019Q2

2019Q3

2019Q4

2020Q1

2020Q2

2020Q3

2020Q4

Rate 3.7 3.6 3.5 3.8 4.2 4.0 3.9 3.9 4.3 4.5 4.6 4.8 4.4 4 4 4 4.1 4.1 4.2 4.3

Freddie Mac 7/2019

Mortgage RatesFreddie Mac 30-Year Fixed Rate

- Actual- Projected

20162017 2018

2019

2020

4.0 4.04.1 4.1

Freddie Mac 7/2019

Where Are They Going?

January 2018 – Today Actual Interest Rates

Mortgage RatesFreddie Mac30-Year Fixed Rate

2019 Q3 2019 Q4

2020 Q22020 Q1

2019 2020

Q3 Q4

Q1 Q2

Mortgage Credit Availability

YES NO MAYBE

Apr 2013 Jan 2014 Jan 2015 Jan 2016 Jan 2017 Jan 2018 Jan 2019

MBA 7/2019

Mortgage Credit Availability Index (MCAI), a report from the Mortgage Bankers Association

Mortgage Credit Availability

0

100

200

300

400

500

600

700

800

900

June 2004 June 2005June 2006 June 2007 June 2008 June 2009 June 2010 June 2011 June 2012 June 2013 June 2014 June 2015 June 2016 June 2017 June 2018 May 2019

Historic Data for the MORTGAGE CREDIT AVAILABILITY INDEX

(a report from the Mortgage Bankers Association)

MBA 7/2019

44 44

45 45

46

48

47

49

47

45

43

44

Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May

Average Days To Close A Loan

All Closed Loans as per Ellie Mae

Last 12 Months

726

725

724

727 727 727

726

724

726 726

728 728

Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May

All Closed Loans as per Ellie Mae

FICO® Score RequirementsLast 12 Months

0.06% 0.7%

8.7%

18.2%

23.5%

34.7%

14.2%

500-549 550-599 600-649 650-699 700-749 750-799 800+

FICO® Score Distribution

51.16%All Closed Loans as per Ellie Mae

Average FICO® Scorefor Closed Purchase Loans

by Loan Type

All Closed Loans as per Ellie Mae

728 754

674

709

All Loans Conventional FHA VA

38 36

44 42

All Loans* Conventional FHA VA

Average Back-End DTIfor Closed Purchase Loans by Loan Type

All Closed Loans as per Ellie Mae