What Do the Numbers Tell Us?

David CroweChief Economist

ULI Terwilliger Center for Housing

Comparable Progress To DateCurrent Production Relative to 2000-2002 Levels

Remodeling Multifamily Single-family0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.02

0.66

0.38

What’s taking single-family so long?

Household Formations

Households Owner Renter

-400

-200

0

200

400

600

800

1,000

1,200

1,400

1,600

1,335

1,134

202

589

-222

810

2001-2006 2007-2012

(000s)

Employment Levels – Subpar increases

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 3598

100

102

104

106

108

110

112

60-61 69-70 73-75 80-82 90-91 2001 2007-09

Index, end of recession = 100

High Delinquency Inventory But VariesFL MD

DE

WA

NY

UT

OR

SC

NC MI

NM LA ME

TN WI

AZ

MO

MS

KY TX OK VT

WV

NE

SD

ND

0123456789

1011121314151617181920

Six states with more than oneyear’s inventory of distressed properties

24 states with less than six months inventoryof distressed properties

Foreclosure inventory plus 90-day+ delinquencies

U.S. = 8.4 months

Foreclosure inventory plus 90-day+ delinquencies month’s supply at annual sales rate

00 01 02 03 04 05 06 07 08 09 10 11 1290

100

110

120

130

140

150

160

170

180

190

200

Case-ShillerFHFANARFlow of Funds

Index, 2000Q1 = 100

House Prices Have Yet to ReboundMeasures of house prices

Credit Standards Still Very Tight

Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12700

710

720

730

740

750

760

770Closed Denied

FICO Scores of Closed vs Denied Conventional Purchase Loans

Builders Losing a Sale Because of Appraisal

Yes, 33%

No; 67%

Housing Permits By Current Performance - MSAs

Top Middle Bottom0%

10%

20%

30%

40%

50%

60%

20%

32%

48%

37%34%

28%

'Normal' Current

Policy Uncertainties

Dodd-Frank regulationsQM – what is a mortgage?QRM – what is a safe mortgage?

Tax reformMortgage interest deductionMarginal tax rates

Debt/deficit reductionLess government spending.. where?Reduced tax breaks

GSE futureWhen, how, what?

Election

Questions?Answers: www.housingeconomics.comeyeonhousing.wordpress.com