Keeping Current Matter March US Real Estate Market Review
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MARCH 2017
“Consumer confidence increased in<br />
February and remains at a 15-year<br />
high. Consumers rated current<br />
business and labor market conditions<br />
more favorably this month than in January.<br />
Expectations improved regarding the shortterm<br />
outlook for business, and to a lesser<br />
degree jobs and income prospects. Overall,<br />
consumers expect the economy to continue<br />
expanding in the months ahead.”<br />
Lynn Franco<br />
Director of Economic Indicators
“Driven in part by a healthy<br />
economy and near historic low<br />
inventory, the U.S. housing market<br />
is showing signs of picking up steam.<br />
Home price increases in December<br />
were the largest in two and a half years,<br />
and homebuyers should expect the<br />
quickening of price gains to persist this<br />
spring buying season.”<br />
Ralph McLaughlin<br />
Trulia Chief Economist
“Even though Denver overall saw<br />
an 11.4% increase in year-over-year<br />
median sale prices in 2016, the top<br />
end of the market has shown signs of<br />
softening, according to the Denver Metro<br />
Association of <strong>Real</strong>tors.<br />
The number of $1 million-plus homes sold in<br />
December dropped over 26% from the<br />
previous year, with prices down 4.85%.”<br />
Wall Street Journal
Case Shiller<br />
Year-Over-Year PRICE CHANGES<br />
20 City Composite<br />
Jan<br />
2014<br />
Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan<br />
2015<br />
Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan<br />
2016<br />
Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec<br />
S&P Case Shiller 3/2017
Year-Over-Year Change in Price<br />
By Region<br />
FHFA
Year-Over-Year Change in Price<br />
By State<br />
FHFA
Actual Year-Over-Year % Change in Price<br />
By State<br />
CoreLogic
Quarter-Over-Quarter Change in Price<br />
By State<br />
FHFA
Month-Over-Month % Change in Price<br />
By State<br />
CoreLogic
Home Price<br />
Expectation<br />
Survey<br />
A nationwide panel of<br />
over one hundred<br />
economists, real estate<br />
experts and<br />
investment & market<br />
strategists.
7.1<br />
3.6<br />
Pre-Bubble<br />
Bubble<br />
Average Annual %<br />
APPRECIATION<br />
Bust<br />
-5.4<br />
5.0<br />
Recovery<br />
To Date<br />
1987 - 1999 Jan 2000 - Apr 2007 May 2007 - Dec 2011 Jan 2012 - Dec 2016<br />
Home Price Expectation Survey 2017 1Q
4.4<br />
PROJECTED<br />
Mean Percentage Appreciation<br />
3.4<br />
2.8 2.7 2.8<br />
2017 2018 2019 2020 2021<br />
Home Price Expectation Survey 2017 1Q
26.7%<br />
Cumulative House<br />
Appreciation<br />
by 2021<br />
19.4%<br />
Bulls<br />
All<br />
Projections<br />
6.3%<br />
Bears<br />
Home Price Expectation Survey 2017 1Q
$42,898<br />
$292,898<br />
potential growth in family wealth over the next<br />
five years based solely on increased home equity<br />
$284,921<br />
$277,430<br />
$269,874<br />
$261,000<br />
$250,000<br />
January 2017 January 2018 January 2019 January 2020 January 2021 January 2022<br />
Increased home equity based on price appreciation projected by the Home Price Expectation Survey<br />
Home Price Expectation Survey 2017 1Q
“Last year ended with a<br />
bang with home prices up<br />
over 7 percent nationally, led<br />
largely by major metro areas. We<br />
expect prices to continue to rise<br />
just under 5 percent in 2017<br />
buoyed by lack of supply and<br />
continued high demand.”<br />
Anand Nallathambi<br />
President & CEO of CoreLogic
Forecasted Year-Over-Year % Change in Price<br />
By State<br />
CoreLogic
“Tight inventory has been a key<br />
contributing factor to the<br />
year-over-year growth in home<br />
values. This steady growth could<br />
very well lead to more availability, driving<br />
homeowners to consider cashing in on<br />
their growing equity by putting their home<br />
on the market. When this happens, it will<br />
open up new opportunities for eager<br />
buyers.”<br />
Bob Walters<br />
Quicken Loans Chief Economist
“Although interest rates rose<br />
sharply during the fourth quarter,<br />
our data show no signs of a home<br />
price slowdown.<br />
Although it will certainly take more time<br />
for the full effects of the elevated interest rates to<br />
be felt, there is no evidence of a normalization in<br />
the unusually low inventories of homes available<br />
for sale, which has been the primary force behind<br />
the extraordinary price gains.”<br />
Andrew Leventis<br />
FHFA Deputy Chief Economist
Mortgage Rate Projections<br />
Quarter Fannie Mae MBA NAR<br />
Average<br />
of All Three<br />
2017 2Q 4.2 4.4 4.3 4.30<br />
2017 3Q 4.2 4.6 4.5 4.43<br />
2017 4Q 4.3 4.7 4.6 4.53<br />
2018 1Q 4.3 4.8 4.8 4.63<br />
3/2017
“In your opinion, at what level will the 30-year fixed rate<br />
mortgage rate significantly slow home value appreciation?”<br />
23<br />
16<br />
18<br />
11<br />
7<br />
1<br />
0<br />
1<br />
3<br />
4<br />
3<br />
2<br />
4<br />
0<br />
1<br />
4% 4.25% 4.5% 4.75% 5% 5.25% 5.5% 5.75% 6% 6.25% 6.5% 6.75% 7% 7.25% 7.5%<br />
Pulsenomics
$850<br />
Median Asking<br />
$800<br />
$750<br />
$700<br />
RENT<br />
$650<br />
$600<br />
since 1988<br />
$550<br />
$500<br />
$450<br />
$400<br />
$350<br />
$300<br />
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016<br />
Census
The Cost of<br />
RENTING vs. BUYING<br />
HISTORICALLY:<br />
NOW:<br />
Percentage of Income Needed to Afford Median Rent<br />
25% 29.2%<br />
Percentage of Income Needed to Afford Median Home<br />
21% 15.8%
<strong>Real</strong>tors ® Affordability Distribution Score<br />
January 2017<br />
NAR
Average Days on the <strong>Market</strong><br />
By State<br />
NAR
5,500,000<br />
EXISTING<br />
Home Sales<br />
5,000,000<br />
4,500,000<br />
Since January 2012<br />
4,000,000<br />
Jan 2012 Jan 2013 Jan 2014 Jan 2015 Jan 2016 Jan 2017<br />
NAR 3/2017
5,700,000<br />
5,600,000<br />
5,500,000<br />
EXISTING<br />
Home Sales<br />
5,400,000<br />
5,300,000<br />
5,200,000<br />
5,100,000<br />
5,000,000<br />
4,900,000<br />
4,800,000<br />
4,700,000<br />
4,600,000<br />
4,500,000<br />
4,400,000<br />
Since January 2014<br />
4,300,000<br />
Jan 2014 Jan 2015 Jan 2016 Jan 2017<br />
NAR 3/2017
EXISTING<br />
8.4%<br />
Home Sales<br />
Y-O-Y by region<br />
6.7%<br />
3.8%<br />
3.1%<br />
Midwest<br />
-0.8%<br />
U.S. South Northeast West<br />
NAR 3/2017
Existing Home Sales<br />
in thousands<br />
January February <strong>March</strong> April May June July August September October November December<br />
2016 2017<br />
Freddie Mac
New Home Sales<br />
in thousands<br />
January February <strong>March</strong> April May June July August September October November December<br />
2016 2017<br />
Freddie Mac
New Home Sales<br />
Annualized<br />
in thousands<br />
Census
30%<br />
27%<br />
New Home<br />
Sales<br />
% of sales by price range<br />
15%<br />
9%<br />
9%<br />
5%<br />
4%<br />
Under $150K $150-$199K $200-299K $300-$399K $400-$499K $500-$749K Over $750K<br />
Census
New Homes Selling Fast<br />
(median months from completion to sold)<br />
4.0<br />
3.9<br />
4.0<br />
4.0<br />
4.0 4.1 3.8<br />
3.8<br />
3.5 3.5<br />
3.7<br />
3.6<br />
3.3<br />
3.2<br />
2.9 3.0 2.9<br />
3.3<br />
3.2<br />
3.0 3.1 3.3 3.3<br />
3.2<br />
Census
Total Home Sales<br />
in thousands<br />
632<br />
578<br />
568<br />
586<br />
471<br />
525<br />
530<br />
491<br />
460<br />
475<br />
361<br />
341<br />
359<br />
January February <strong>March</strong> April May June July August September October November December<br />
2016 2017<br />
Freddie Mac
2017<br />
2016<br />
2015<br />
Pending Home Sales<br />
2014<br />
January February <strong>March</strong> April May June July August September October November December<br />
NAR 3/2017
115<br />
110<br />
PENDING<br />
Home Sales<br />
since 2012<br />
105<br />
100<br />
100 = Historically Healthy Level<br />
95<br />
90<br />
January 2012 January 2013 January 2014 January 2015 Janaury 2016<br />
NAR 3/2017
115<br />
110<br />
PENDING<br />
Home Sales<br />
since 2014<br />
105<br />
100<br />
100 = Historically Healthy Level<br />
95<br />
90<br />
January 2014 January 2015 Janaury 2016<br />
NAR 3/2017
PENDING<br />
3.6%<br />
Home Sales<br />
2.0%<br />
Year-Over-Year By Region<br />
0.4%<br />
West<br />
U.S. Midwest<br />
Northeast South<br />
-0.4%<br />
-3.8%<br />
NAR 3/2017
35%<br />
Percentage of<br />
Distressed Property<br />
Sales<br />
9%<br />
7%<br />
January 2012 - Today<br />
Jan 2012 Jan 2013 Jan 2014 Jan 2015 Jan 2016 Jan 2017<br />
NAR 3/2017
Home Prices
EXISTING<br />
Home Prices<br />
Y-O-Y by region<br />
9.2%<br />
7.1%<br />
6.5%<br />
6.8%<br />
2.5%<br />
U.S. Northeast Midwest West South<br />
NAR 3/2017
% Change in Sales<br />
from last year by Price Range<br />
17.2%<br />
19.2%<br />
24.7%<br />
22.2%<br />
4.9%<br />
-9.5%<br />
$0-100K $100-250K $250-500K $500-750K $750K-1M $1M+<br />
% -9.5% 4.9% 17.2% 19.2% 24.7% 22.2%<br />
NAR 3/2017
0.14<br />
0.12<br />
Case Shiller<br />
Year-Over-Year<br />
PRICE<br />
0.1<br />
CHANGES<br />
0.08<br />
0.06<br />
0.04<br />
0.02<br />
0<br />
June 2012 January 2013 January 2014 January 2015 January 2016<br />
S&P Case Shiller 3/2017
13.2%<br />
12.9%<br />
12.4%<br />
10.8%<br />
9.3%<br />
Case Shiller<br />
Year-Over-Year PRICE CHANGES<br />
20 City Composite<br />
8.1%<br />
6.7%<br />
5.6%<br />
5.4% 5.5% 5.7% 5.7% 5.7% 5.4% 5.5% 5.6%<br />
5.4%<br />
5.0% 5.0%<br />
4.8%<br />
4.9% 4.9% 5.0% 5.0%<br />
5.1% 5.0% 5.0% 5.1% 5.0% 5.1% 5.2%<br />
4.5% 4.3% 4.4% 4.6% 4.7%<br />
Jan<br />
2014<br />
Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan<br />
2015<br />
Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan<br />
2016<br />
Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec<br />
S&P Case Shiller 3/2017
Forecasted Year-Over-Year % Change in Price<br />
By State<br />
CoreLogic
Appraiser Home Value Opinions<br />
Compared to Homeowner Estimates<br />
-1.69<br />
-1.56<br />
-1.26<br />
-1.15<br />
-1.00<br />
-1.33<br />
-1.47<br />
-1.99<br />
-1.95<br />
-1.89 -1.93<br />
-2.17<br />
Last 12 Months<br />
Mar April May Jun Jul Aug Sep Oct Nov Dec Jan Feb<br />
% -1.99 -2.17 -1.95 -1.89 -1.93 -1.69 -1.56 -1.26 -1.15 -1.00 -1.33 -1.47<br />
Quicken Loans
HO<strong>US</strong>ING<br />
INVENTORY
Seller Traffic<br />
By State<br />
NAR
Months Inventory of<br />
HOMES FOR SALE<br />
2011 - Today<br />
January<br />
2011<br />
January<br />
2012<br />
January<br />
2013<br />
January<br />
2014<br />
January<br />
2015<br />
January<br />
2016<br />
January<br />
2017<br />
NAR 3/2017
6.0<br />
5.5<br />
Months Inventory of<br />
HOMES FOR SALE<br />
last 2 years<br />
5.0<br />
4.5<br />
4.0<br />
3.5<br />
Feb Mar Apr May Jun July Aug Sep Oct Nov Dec Jan-16 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan-17<br />
NAR 3/2017
Months Inventory of<br />
4.3<br />
4.4<br />
4.6<br />
4.7<br />
4.6<br />
HOMES FOR SALE<br />
4.8<br />
4.5 4.5<br />
4.4<br />
Last 12 Months<br />
4.0<br />
3.6 3.6<br />
Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan<br />
NAR 3/2017
Year-over-Year<br />
Inventory Levels<br />
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan<br />
% - -20. -16. - - -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% -0.5 -0.5 -0.5 2.0% -0.9 1.8%0.4% -4.7 -1.7 -3.1 -4.5 -1.9 -3.8 -2.2 -1.1 -1.5 -3.6 -9.6 -5.8 -5.8 -10. -6.8 -10. -9.3 -6.3 -7.1<br />
NAR 3/2017
HO<strong>US</strong>ING SUPPLY<br />
Year-Over-Year Last 12 Months<br />
Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan<br />
-1.1%<br />
-1.5%<br />
-3.6%<br />
-4.3%<br />
-5.8% -5.8%<br />
-6.8%<br />
-6.3%<br />
-7.1%<br />
-9.6%<br />
-10.1%<br />
-9.3%<br />
NAR 3/2017
New Home Inventory<br />
months supply<br />
5.7<br />
5.7<br />
5.5 5.5 5.5<br />
5.1 5.1<br />
5.2<br />
5.2<br />
5.1<br />
5.2 5.2<br />
4.6<br />
Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec<br />
2016 2017 Census
New Home Inventory<br />
months supply<br />
Last 12 Months<br />
5.7 5.7<br />
5.5 5.5<br />
5.1 5.1<br />
5.2<br />
5.2<br />
5.1<br />
5.2 5.2<br />
4.6<br />
Feb Mar Apr May June July Aug Sep Oct Nov Dec Jan-17<br />
Census
BUYER<br />
DEMAND
Buyer Traffic<br />
By State<br />
NAR
Foot Traffic<br />
indicator of future sales<br />
Jul 2013 Jan 2014 Jan 2015 Jan 2016 Jan 2017<br />
NAR 3/2017
Foot Traffic<br />
indicator of future sales<br />
Last 12 Months<br />
Feb Mar Apr May June July Aug Sept Oct Nov Dec Jan 2017<br />
NAR 3/2017
Foot Traffic<br />
indicator of future sales<br />
2016 2017<br />
January February <strong>March</strong> April May June July August September October November December<br />
NAR 3/2017
INTEREST<br />
RATES
4.29<br />
4.19<br />
4.09<br />
3.99<br />
3.89<br />
3.97<br />
30 Year Fixed<br />
Rate Mortgages<br />
from Freddie Mac<br />
4.21<br />
3.79<br />
3.69<br />
3.59<br />
3.49<br />
3.39<br />
Freddie Mac 3/2017
Mortgage Rate Projections<br />
Quarter Fannie Mae MBA NAR<br />
Average<br />
of All Three<br />
2017 2Q 4.2 4.4 4.3 4.30<br />
2017 3Q 4.2 4.6 4.5 4.43<br />
2017 4Q 4.3 4.7 4.6 4.53<br />
2018 1Q 4.3 4.8 4.8 4.63<br />
3/2017
Mortgage Rates<br />
Freddie Mac<br />
30 Year Fixed Rate<br />
2015 2016 2017<br />
- Actual<br />
- Projected<br />
2015 Q1 2015 Q2 2015 Q3 2015 Q4 2016 Q1 2016 Q2 2016 Q3 2016 Q4 2017 Q1 2017 Q2 2017 Q3 2017 Q4<br />
Rate 3.7 3.8 4 3.9 3.7 3.6 3.5 3.8 4.3 4.4 4.5 4.5<br />
Freddie Mac
Mortgage Credit Availability<br />
YES NO MAYBE
Mortgage Credit<br />
Availability<br />
Mortgage Credit Availability Index (MCAI), a<br />
report from the Mortgage Bankers Association<br />
Apr 2013 Jan 2014 Jan 2015 Jan 2016<br />
MBA
900<br />
800<br />
700<br />
600<br />
500<br />
400<br />
Historic Data for the<br />
MORTGAGE CREDIT<br />
AVAILABILITY INDEX<br />
(a report from the Mortgage Bankers Association)<br />
300<br />
200<br />
100<br />
0<br />
June 2004 June 2005 June 2006 June 2007 June 2008 June 2009 June 2010 June 2011 June 2012 June 2013 June 2014 June 2015 June 2016 January<br />
2017<br />
MBA
Average Days To Close A Loan<br />
Last 12 Months<br />
48 48<br />
49<br />
50 51<br />
46<br />
44 44<br />
45<br />
46 46 46<br />
Feb Mar Apr May June July Aug Sept Oct Nov Dec Jan<br />
All Closed Loans as per Ellie Mae
FICO ® Score<br />
Requirements<br />
Last 12 months<br />
727<br />
726<br />
731 731<br />
730<br />
728<br />
726<br />
722<br />
723<br />
724<br />
722<br />
720<br />
Feb Mar Apr May June July Aug Sept Oct Nov Dec Jan-17<br />
All Closed Loans as per Ellie Mae
FICO ® Score<br />
32.2%<br />
Distribution<br />
21.5%<br />
24.5%<br />
12.7%<br />
8.7%<br />
0.02% 0.43%<br />
500-549 550-599 600-649 650-699 700-749 750-799 800+<br />
54.7%<br />
All Closed Loans as per Ellie Mae
Average FICO ® Score<br />
for Closed Purchase Loans<br />
722<br />
752<br />
by Loan Type<br />
707<br />
686<br />
All Loans Conventional FHA VA<br />
All Closed Loans as per Ellie Mae
Average Back End DTI<br />
for Closed Purchase Loans by Loan Type<br />
39<br />
35<br />
43 41<br />
All Loans Conventional FHA VA<br />
All Closed Loans as per Ellie Mae
Resources<br />
Slide Slide Title Link<br />
4 Lynn Franco Quote https://www.conference-board.org/data/consumerconfidence.cfm<br />
5 Ralph McLaughlin Quote https://www.trulia.com/blog/trends/case-shiller-december-16/<br />
6 Wall Street Journal Quote https://www.wsj.com/articles/luxury-home-sellers-slash-millions-off-asking-prices-1487862511<br />
8-9, 11 FHFA Maps https://www.fhfa.gov/DataTools/Tools/Pages/House-Price-Index-(HPI).aspx<br />
14-17,<br />
23<br />
Home Price Expectation<br />
Survey Slides<br />
https://www.pulsenomics.com/Q1_2017_HPE_Survey.php<br />
18 Anand Nallanthambi Quote http://www.corelogic.com/research/hpi/corelogic_hpi_december_2016.pdf<br />
20 Bob Walters Quote<br />
21 Andrew Leventis Quote http://www.housingwire.com/articles/39303-fhfa-rising-interest-rates-not-slowing-down-home-pricesyet<br />
24 Median Asking Rent http://www.census.gov/housing/hvs/files/currenthvspress.pdf<br />
25 Cost of Renting vs. Buying https://www.zillow.com/research/q4-2016-housing-affordability-14199/<br />
26<br />
29, 52,<br />
61<br />
30-32,<br />
43,<br />
45-46,<br />
53-57<br />
<strong>Real</strong>tors Affordability<br />
Distribution Score Map<br />
Average Days on <strong>Market</strong>,<br />
Buyer & Seller Traffic Maps<br />
Existing Home Sales<br />
Report<br />
http://www.quickenloans.com/press-room/2017/02/14/quicken-loans-study-shows-home-appraisal-value-lags-owner-estimatesby-a-wider-spread-for-second-consecutive-month/<br />
https://www.nar.realtor/sites/default/files/reports/2017/embargoes/radcs-02-15/2017-02-realtors-affordability-distribution-curveand-score-02-14-2017.pdf<br />
http://nar.realtor/reports/realtors-confidence-index<br />
http://nar.realtor/<br />
KEEPINGCURRENTMATTERS.COM
Resources<br />
Slide Slide Title Link<br />
33-34, 38<br />
35-37,<br />
58-59<br />
39-42<br />
Freddie Mac Home<br />
Sales<br />
New Home Sales,<br />
Inventory<br />
Pending Home Sales<br />
Report<br />
http://www.census.gov/construction/nrs/pdf/newressales.pdf<br />
http://nar.realtor/<br />
http://www.census.gov/construction/nrs/pdf/newressales.pdf<br />
http://nar.realtor/<br />
7, 47-48 Case Shiller Price Index https://www.spice-indices.com/idpfiles/spice-assets/resources/public/documents/490149_cshomeprice-release-0228.pdf?force_download=true<br />
10, 12, 19,<br />
47<br />
CoreLogic Price<br />
Changes<br />
http://www.corelogic.com/about-us/researchtrends/corelogic-home-price-insights.aspx#<br />
50 Appraisal Challenge<br />
http://www.quickenloans.com/press-room/2017/02/14/quicken-loans-study-shows-home-appraisal-value-lags-owner-estimates-bya-wider-spread-for-second-consecutive-month/<br />
62-64 Foot Traffic http://nar.realtor/<br />
66 Freddie Mac Rates http://www.freddiemac.com/pmms<br />
22, 67-68<br />
70-71<br />
Mortgage Rate<br />
Projections<br />
Mortgage Credit<br />
Availability<br />
http://www.fanniemae.com/resources/file/research/emma/pdf/Housing_Forecast_021617.pdf<br />
http://www.freddiemac.com/finance/pdf/201702-Outlook-02-28-2017.pdf<br />
https://www.mba.org/Documents/Research/Mtg%20Fin%20Forecast%20Feb%202017.pdf<br />
https://www.nar.realtor/sites/default/files/reports/2017/embargoes/forecast-02-2017-us-economic-outlook-02-27-2017.pdf<br />
https://www.mba.org/news-research-and-resources/research-and-economics/single-family-research/mortgage-credit-availability-index<br />
72-76 Ellie Mae Report http://elliemae.com/origination-insight-reports/Ellie_Mae_OIR_JANUARY2017.pdf<br />
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