June Market Update Report 2015

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  1. 1. JUNE 2015
  2. 2. UPDATES UPDATES
  3. 3. Home Prices
  4. 4. The Impact of Monthly Housing Inventory on Home Prices LESS THAN 6 MONTHS BETWEEN 6-7 MONTHS GREATER THAN 7 MONTHS SELLERS MARKET Homes prices will appreciate NEUTRAL MARKET Homes prices will only appreciate with inflation BUYERS MARKET Homes prices will depreciate
  5. 5. FHFA Year-Over-Year Percent Change in Price by Region
  6. 6. FHFA Year-Over-Year Percent Change in Price by State
  7. 7. FHFA Quarter-Over-Quarter Percent Change in Price by State
  8. 8. Source: CoreLogic 12-Month Home Price Change
  9. 9. 1-Month Home Price Change Source: CoreLogic
  10. 10. 13.2% 12.9% 12.4% 10.8% 9.3% 8.1% 6.7% 5.6% 4.8% 4.5% 4.3% 4.5% 4.6% 5.0% 5.0% Jan 2014 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan 2015 Feb Mar S&P Case Shiller 5/2015 Year-Over-Year PRICE CHANGES 20 City Composite Case Shiller
  11. 11. 6.8% 5.1% 2.7% 12 Month 3 Month 1 Month CoreLogic National Home Price Index 6/2015 Change in Residential Single Family HOME PRICES
  12. 12. Home Price Expectation Survey A nationwide panel of over one hundred economists, real estate experts and investment & market strategists.
  13. 13. Average Annual % APPRECIATION Pre-Bubble Bubble Bust Recovery To Date Home Price Expectation Survey 2015 2Q
  14. 14. PROJECTED Mean Percentage Appreciation Home Price Expectation Survey 2015 2Q
  15. 15. Cumulative House Appreciation by 2019 26.7% 19.4% 11.8% Bulls All Projections Bears Home Price Expectation Survey 2015 2Q
  16. 16. 8.7% 11.3% 4.8% 6.0% 5.3% 2012 2013 2014 2015 April 2015 - April 2016 Core Logic Percentage Change in U.S. HOME PRICE APPRECIATION PROJECTED
  17. 17. All signs are pointing toward continued price appreciation throughout 2015 Anand Nallathambi, CEO of CoreLogic Tight inventories, job growth and the impact of demographics and household formation are pushing price levels in many states toward record levels.
  18. 18. Is another HOUSING BUBBLE about to take place?
  19. 19. This spring buying season is off to a strong start - in fact, prices are going up faster than they were just a few months ago, according to nearly every recent metric. So does that mean were in a bubble? Nope, thats just what happens when demand increases faster than supply. Jonathan Smoke, realtor.com Chief Economist
  20. 20. Given the long stretch of strong reports, it is no surprise that people are asking if were in a new home price bubble I would describe this as a rebound in home prices, not a bubble and not a reason to be fearful. David M. Blitzer, Managing Director & Chairman of the Index Committee for S&P Dow Jones Indices
  21. 21. Without data, youre just another person with an opinion. W. Edwards Deming
  22. 22. 6.8% 5.1% 2.7% -9% 12 Month 3 Month 1 Month Peak-to-Current CoreLogic National Home Price Index 6/2015 Change in Residential Single Family HOME PRICES
  23. 23. Source: CoreLogic 9% Price & Time Since The Peak
  24. 24. Its not about having the dots. Its about CONNECTING the dots!! Seth Godin
  25. 25. $187,000 $195,400 $223,200 $5,400 $5,400 $5,500 2010 2013 2015 Projected Homeowner Renter NAR Increasing Gap in Family Wealth
  26. 26. Increasing Gap in Family Wealth $182K $190K $218K NAR
  27. 27. $250,000 $260,750 $270,398 $279,592 $288,539 $297,772 January 2015 January 2016 January 2017 January 2018 January 2019 January 2020 $47,772 Increased home equity based on price appreciation projected by the Home Price Expectation Survey potential growth in family wealth over the next five years based solely on increased home equity Home Price Expectation Survey 2015 2Q
  28. 28. $217,726 $18,672 $54,879 30 Year Total Financial Benefit of Owning Penalty of Waiting 1 Year to Buy Penalty of Waiting 3 Years to Buy realtor.com 5.2015 The COST of Waiting to Buy*Nationally, the estimated wealth an average buyer would accumulate over a thirty year period *Assuming projected increases in mortgage rates and continuing price appreciation
  29. 29. $18,672 $54,879 Penalty of Waiting 1 Year to Buy Penalty of Waiting 3 Years to Buy realtor.com 5.2015 The COST of Waiting to Buy* *Assuming projected increases in mortgage rates and continuing price appreciation
  30. 30. $680 $720 $760 2010 2011 2012 2013 2014 Median Asking Rent 2010 - 2014 U.S. Census
  31. 31. 4,300,000 4,400,000 4,500,000 4,600,000 4,700,000 4,800,000 4,900,000 5,000,000 5,100,000 5,200,000 5,300,000 Jan 2014 Feb Mar Apr May Jun July Aug Sept Oct Nov Dec Jan 2015 Feb Mar Apr NAR 5/2015 EXISTING Home Sales
  32. 32. NAR 4/2015 6.1% 1.6% 3.6% 6.4% 13% U.S. Northeast South West Midwest by region EXISTING
  33. 33. -10.1% 9% 21.2% 19.1% 18% 13% $0-100K $100-250K $250-500K $500-750K $750K-1M $1M+ % -10.1% 9.0% 21.2% 19.1% 18.0% 13.0% % Change in Sales from last year by Price Range NAR 5/2015
  34. 34. 33 39 35 45 39 45 39 49 2014 2015 Jan Feb March April 281 281 282 295 355 403 422 425 2014 2015 Freddie Mac EXISTING NEW HOME
  35. 35. 90 92 94 96 98 100 102 104 106 108 110 112 January 2014 February March April May June July August September October November December January 2015 February March April 100 = Historically Healthy Level NAR 5/2015 PENDING Home Sales
  36. 36. NAR 5/2015 14.0% 9.4% 13.3% 14.8% 16.4% U.S. Northeast Midwest South West Year-over-Year Pending Home Sales by region
  37. 37. July 2013 August September October Novem ber Decem ber January 2014 February March April May June July August September October Novem ber Decem ber January 2015 February March April Foot Traffic NAR 5/2015
  38. 38. according to the First-Time Buyer Mortgage Share Index by AEIs International Center on Housing Risk 52.2% of all buyers were first time buyers in April AEIs International Center on Housing Risk First Time Home Buyers
  39. 39. AEIs International Center on Housing Risk 532K 577K November 2013-April 2014 November 2014-April 2015 Number of primary owner-occupied, first-time buyer purchase mortgages 8.5% increase
  40. 40. 5.2 5.7 5.5 5.5 5.5 5.5 5.3 5.1 5.1 4.4 4.6 4.7 4.6 5.3 Mar Apr May Jun Jul Aug Sep Oct Nov Mar Jan-15 Feb Mar Apr Months Inventory of HOMES FOR SALE NAR 5/2015 last 12 months
  41. 41. 6% 5.2% 5% -0.50% -0.50% -0.50% 2% -0.90% September October November December January 2015 February March April NAR 5/2015 Inventory Levels Year-over-Year
  42. 42. 3.2 3.4 3.6 3.8 4 4.2 4.4 4.6 Freddie Mac 5/2015 Freddie Mac Actual Rates January 2013 June 2015 30 Year Fixed Rate Mortgages
  43. 43. 3.5 3.6 3.7 3.8 3.9 Freddie Mac 5/2015 Freddie Mac Rates April May 2015 30 Year Fixed Rate Mortgages
  44. 44. Decade Average Rate 1970s 8.86% 1980s 12.7% 1990s 8.12% 2000s 6.29% Historic Mortgage Rates by Decade Freddie Mac
  45. 45. 4.5% 3.7% 4.0% 4.2% 3.9% 4.9% 2011 2012 2013 2014 May 2015 2016 30 Year Fixed Rate Mortgage Rates Freddie Mac
  46. 46. Quarter Fannie Mae Freddie Mac MBA NAR Average of all Four 2015 3Q 3.8 4.1 4.3 4.0 4.1% 2015 4Q 3.9 4.3 4.4 4.2 4.2% 2016 1Q 4.0 4.5 4.6 4.4 4.4% 2016 2Q 4.0 4.7 4.8 4.7 4.6% Mortgage Rate Projections 4/2015
  47. 47. 4.1 4.3 4.5 4.7 Where Are They Going? Q3 Q4 2016 Q1 2016 Q2 Where Have They Been This Year? Freddie Mac Mortgage Rates Freddie Mac 30 Year Fixed Rate
  48. 48. The rule for when is it time to refinance or buy is always the same: given your household budget and where current interest rates are, if it makes good financial sense to refinance or take out a home loan today, then today is the day to do it. Doug Duncan, Senior Vice President and Chief Economist at Fannie Mae
  49. 49. April 2013 May June July Aug Sept Oct Nov Dec Jan 2014 Feb March April May June July Aug Sept Oct Nov Dec Jan 2015 Feb March April Mortgage Credit Availability Index (MCAI), a report from the Mortgage Bankers Association Mortgage Credit Availability
  50. 50. 112 114 116 118 120 122 Oct Nov Dec Jan 2015 Feb March April Mortgage Credit Availability Index (MCAI), a report from the Mortgage Bankers Association Mortgage Credit Availability
  51. 51. UPDATES
  52. 52. 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% June 2012 January 2013 January 2014 Jan 2015 March S&P Case Shiller 5/2015 Year-Over-Year PRICE CHANGES Case Shiller
  53. 53. -25% -20% -15% -10% -5% 0% 5% 10% Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr % -24% -20.8 -16.8 -14% -13% -7.6% -5% -6.2% 1.8% 0.9% 5.0% 1.6% 7.3% 5.3% 3.2% 6.5% 6% 5.5% 5.8% 4.5% 6% 5.2% 5% -0.50 -0.50 -0.50 2% -0.90 NAR 5/2015 Year-over-Year Inventory Levels
  54. 54. 4.0 5.0 6.0 7.0 8.0 9.0 10.0 January 2011 January 2012 January 2013 January 2014 January 2015 Months Inventory of HOMES FOR SALE NAR 5/2015 2011 - Today
  55. 55. 4.0 4.5 5.0 5.5 6.0 Mar-13 Apr May Jun Jul Aug Sept Oct Nov Dec Jan '14 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan-15 Feb Mar Apr Months Inventory of HOMES FOR SALE NAR 5/2015 last 2 years
  56. 56. 5.1 4.4 4.6 4.7 4.6 5.3 Nov Dec Jan Feb Mar Apr Months Inventory of HOMES FOR SALE NAR 5/2015 last 6 months
  57. 57. 4,000,000 4,500,000 5,000,000 5,500,000 Jan 2012 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan 2013 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan 2014 Feb Mar Apr May Jun July Aug Sept Oct Nov Dec Jan 2015 Feb Mar Apr NAR 5/2015 EXISTING Home Sales
  58. 58. 90 95 100 105 110 January 2012 January 2013 January 2014 January 2015 100 = Historically Healthy Level NAR 5/2015 PENDING Home Sales
  59. 59. Jan 2012 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan 2013 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan 2014 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan 2015 Feb Mar Apr Percentage of Dist