February 2016 Real Estate Market Update
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Transcript of February 2016 Real Estate Market Update
Average days needed to close a loan…49 days is the longest time needed to
close a loan since February 2013
All closed loans as per Ellie Mae
NAR
Overall, a resilient U.S.
economy and very solid job
growth in recent years made
2015 a great rebound year for
the housing market.
Existing-home sales were at the
highest pace (5.26 million) since 2006
(6.48 million) and the Pending Home
Sales Index came in at an average of
108.8, the highest annual reading since…
you guessed it: 2006 (111.7).
Single-family starts were up 10.4% to 715,300.
All four census regions also experienced
increases in single-family starts for 2015.
NAHB
With the December report on
housing starts and permits,
preliminary totals for 2015 are
now available. Total housing
starts at 1.11 million were up
10.8% in 2015 compared to 2014.
Jonathan SmokeRealtor.com Chief Economist
“All indicators point to
this spring being the
busiest since 2006…
but we’ll need to see
inventory grow more robustly
this year to satisfy these buyers.”
…according to the First-Time Buyer Mortgage Share
Index by AEI’s International Center on Housing Risk
% of all buyers
were first time
buyers this
month
AEI’s International Center on Housing Risk
First Time Home Buyers
Typical First Time
Buyers
Percent of All
First Time (FT)
Buyers
Household
Income
Median Age
(in years)
All FT Buyers 100% $69,400 31
Married Couple 56% $77,500 31
Single Female 18% $49,400 32
Single Male 11% $58,100 30
Unmarried Couple 13% $74,600 28
Other 2% $63,800 45
NAR’s Profile of Home Buyers and Sellers
2016 300,000
2017 500,000
2018 400,000
2019 300,000*Boomerang Buyer is defined as someone who was 60+ days past due on a mortgage
loan, lost their mortgage through foreclosure, short sale or other non-satisfactory
closure, or had a mortgage loan modification between the Bubble and Burst.
Boomerang Buyers Re-entering the Housing Market
TransUnion
The Impact of Monthly Housing
Inventory on Home Prices
LESS THAN
6 MONTHS
BETWEEN
6-7 MONTHS
GREATER THAN
7 MONTHS
SELLERS
MARKETHomes prices
will appreciate
NEUTRAL
MARKETHomes prices
will only
appreciate with
inflation
BUYERS
MARKETHomes prices
will depreciate
30%
60%
75%
90%
10%The percentage of
potential buyers who
will look for property
+15%
-10%
+10%
Market Value
-15%
Impact of price
on visibility
NAR from Move Sales, Inc.
Fannie Mae & CoreLogic
23%
8%
% who believe they are negative in equity % actually in negative equity
Negative Equity (>0%)
Perceived/Actual
37%
74%
% who believe they have > than 20% equity % who actually have > 20% equity
SignificantEquity (>20%)
Perceived/Actual
Fannie Mae & CoreLogic
Realtor Magazine
By the end of 2015,
about 12.6 million
properties – or 22.5%
of all properties with a
Mortgage - were considered
“equity rich,” having at least
50 percent equity.
32% of all Home Transactions Experience Delays
Washington Post
Of those experiencing delays,
the reasons for the delay…
QuarterFannie
Mae
Freddie
MacMBA NAR
Average
of all four
2016 2Q 4.1% 4.2% 4.2% 4.2% 4.18%
2016 3Q 4.1% 4.4% 4.4% 4.4% 4.33%
2016 4Q 4.2% 4.5% 4.6% 4.7% 4.50%
2017 1Q 4.2% 4.6% 4.7% 4.8% 4.58%
Mortgage Rate Projections
2/2016
“In many markets, mortgage
rates would have to be
7, 8, 9, even 10%for the cost of owning to roughly
equate to the cost of renting.
So the financial advantage for
home ownership will still persist
even if mortgage rates rise.”
Ralph McLaughlin Chief Economist at Trulia
“If at today’s interest
rates and house prices
they can find the house
that can fit their budget,
they should buy.”
Doug DuncanFannie Mae’s Senior VP and Chief Economist
A recent Fannie Mae survey
found that consumers have
limited understanding of what it
takes to qualify for a mortgage,
and most believe the requirements
are tougher than they are.
When asked about key mortgage qualification
criteria (such as down payment percentage,
credit score, and debt-to-income ratio),
roughly half of consumers selected “don't
know” or provided an incorrect answer.
This research suggests
that there are too many
eligible homebuyers sitting
on the sidelines due to
misperceptions or anxiety
about being turned down for a loan.
Fannie Mae
Mortgage Credit Availability Index (MCAI), a
report from the Mortgage Bankers Association
Mortgage Credit
Availability
from May 2011 until Today
HPSI
Fannie Mae’s
Home Purchase
Sentiment Index
(HPSI)
The HPSI distills results from Fannie Mae’s consumer-focused National
Housing Survey into a single, monthly, predictive indicator. Fannie Mae
Resources
KEEPINGCURRENTMATTERS.COM
Slide Slide Title Link
4, 5 Existing Home Sales http://www.realtor.org
6 Average Days On The Market http://www.realtor.org/reports/realtors-confidence-index
7 Average Days To Close http://elliemae.com/origination-insight-reports/Ellie_Mae_OIR_DECEMBER2015.pdf
8 New Homes Selling Quickly http://www.census.gov/construction/nrs/pdf/newressales.pdf
9 NAR Quote http://narnewsline.blogs.realtor.org/2016/01/28/recapping-a-solid-2015-for-housing/
10 NAHB Quote http://eyeonhousing.org/2016/01/home-construction-up-for-2015/
11 Jonathan Smoke Quote http://www.dsnews.com/news/02-01-2016/economic-woes-are-not-dampening-housing-for-2016-so-far
12 - 14Months Inventory, YOY
Inventory, Distressed Saleshttp://www.realtor.org
15 Foreclosure Inventory by State http://www.corelogic.com/about-us/researchtrends/national-foreclosure-report.aspx#.VmhKqeMrJE4
16, 19Number of Households,
Median Asking Renthttp://www.census.gov/housing/hvs/data/histtabs.html
17 First Time Homebuyers http://www.housingrisk.org/
18 Typical 1st Time Homebuyers http://www.realtor.org/reports/highlights-from-the-2015-profile-of-home-buyers-and-sellers
20 Boomerang Buyers http://www.transunioninsights.com/boomerang/
22 EHS Prices, http://www.realtor.org
23 Forecasted YOY Prices http://www.corelogic.com/about-us/researchtrends/corelogic-home-price-insights.aspx#
24 Prices Since June 2006 http://www.freddiemac.com/finance/pdf/dec_2015_public_outlook.pdf
25 Impact of Price on Visibility http://infocentral.blogs.realtor.org/2015/03/12/graphics-for-home-sellers/#sf7996259
Resources
KEEPINGCURRENTMATTERS.COM
Slide Slide Title Link
27 New Home Inventory http://www.census.gov/construction/nrs/pdf/newressales.pdf
28, 29Perception vs. Reality:
Negative & Significant Equity
http://fanniemae.com/portal/about-us/media/commentary/080315-deggendorf-wilcox.html?sf11644984=1
http://www.corelogic.com/about-us/researchtrends/homeowner-equity-report.aspx#.VqpbLFMrJE4
30 Realtor Magazine Quote http://realtormag.realtor.org/daily-news/2016/01/29/equity-gains-for-2015#sf19972497
32 Homeownership Rate ‘05-’15 http://www.census.gov/housing/hvs/data/histtabs.html
34 Transaction Delayshttps://www.washingtonpost.com/realestate/one-third-of-realty-transactions-are-plagued-by-delays-some-of-them-
fatal/2016/01/19/0d74d684-beb9-11e5-83d4-42e3bceea902_story.html
35Appraiser Value vs.
Homeowner Estimatehttp://www.quickenloans.com/press-room/2016/01/13/home-appraisals-fall-short-spread-tightens/
37 Mortgage Rate Projections
http://www.freddiemac.com/finance/pdf/jan_2016_public_outlook.pdf
http://www.fanniemae.com/resources/file/research/emma/pdf/Housing_Forecast_011416.pdf
http://www.realtor.org/sites/default/files/reports/2016/embargoes/forecast-01-2016-us-economic-outlook-01-26-2016.pdf
https://www.mba.org/Documents/Research/Mtg%20Fin%20Forecast%20Jan%202016.pdf
38 Freddie Mac Projections http://www.freddiemac.com/finance/ehforecast.html
39 Ralph McLaughlin Quote http://www.dsnews.com/news/01-22-2016/ask-the-economist-what-will-be-the-biggest-obstacles-to-homeownership-this-year
41 Doug Duncan Quote http://www.thehomestory.com/is-now-the-right-time-to-buy-a-home/?sf19161276=1
43 Difficulty of Getting a Mortgage http://www.fanniemae.com/portal/about-us/media/corporate-news/2016/6333.html
44 - 45 Fannie Mae Quote http://pages.exacttarget.com/page.aspx?QS=5c591a8916642e734a03cfa1570573348c03deb7054f1bafc209e071e1d0385e#bookmark1-1
46 Mortgage Credit Availability http://www.mba.org/ResearchandForecasts/MCAI.htm
48 - 51Avg FICO Score, Avg DTI, Avg
Down Paymenthttp://elliemae.com/origination-insight-reports/Ellie_Mae_OIR_DECEMBER2015.pdf
Resources
KEEPINGCURRENTMATTERS.COM
Slide Slide Title Link
52 Typical Down Payment http://www.realtor.org
53 Fannie Mae’s HPSI http://www.fanniemae.com/portal/about-us/media/corporate-news/2016/6333.html
55, 56 Case Shiller Price Indexhttp://us.spindices.com/index-family/real-estate/sp-case-shillerhttps://www.spice-indices.com/idpfiles/spice-
assets/resources/public/documents/282559_cshomeprice-release-1229.pdf
58 - 62
EHS ‘12-’15, % Change in
Sales, PHS Historic, PHS ‘15,
PHS by Region
http://www.realtor.org
63, 64New Home Sales Annualized,
By Price Rangehttp://www.census.gov/construction/nrs/pdf/newressales.pdf
65-66, 67,
68
Months Inventory of Homes
For Sale, YOY Inventory, Foot
Traffic
http://www.realtor.org
72 Marcus Sheridan Quote http://www.shweiki.com/blog/2016/01/content-marketing-where-do-i-start/
76 Cindy Allen’s Story http://www.keepingcurrentmatters.com/cindyallen
Everyone gets tired of
someone who is constantly
talking about themselves...
When approaching digital
marketing, companies should
approach it from a teaching
perspective because the moment they
try to sound intellectually superior, they
will lose their audience’s trust.
Marcus Sheridan, The Sales Lion