Lunchtime Data Talk

Housing Data: Home Sales, Affordability, and Realtor/Builder Activity Lawrence Yun, National Association of Realtors David Crowe, National Association of Home Builders December 9, 2013

Housing Finance Policy Center

2 2

NAR Housing Data

Existing Home Sales

Lawrence Yun, Ph.D.

Chief Economist

NATIONAL ASSOCIATION OF REALTORS®

Presentation at the Urban Institute

Washington, D.C.

December 9, 2013

3 3

NAR Data

Existing Home Sales

4 4

Existing Home Sales

20% cumulative increase over 2 years

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

5 5

Median Home Price

$100,000

$120,000

$140,000

$160,000

$180,000

$200,000

$220,000

$240,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

6 6

Pending Sales (Contracts, not Closings)

70

80

90

100

110

120

130

2001- Jan

2002- Jan

2003- Jan

2004- Jan

2005- Jan

2006- Jan

2007- Jan

2008- Jan

2009- Jan

2010- Jan

2011- Jan

2012- Jan

2013- Jan

Source: NAR

7 7

Data Collection

• Multiple Listing Service reporting by summary

(form)

• Electronic Connection to Individual Multiple Listing

Service

• State Association Aggregators

– Across MLSs in the state

– One state-association MLS

8 8

Multiple Listing Services

• Multiple listing services enable brokers to cooperate

and make the real estate transaction more efficient

• There are over 900 multiple listing services in the

US

• Monthly Panel

– About 200 boards are selected to participate in

the panel upon which monthly home sales

estimate is based

– Boards are selected for representativeness and

reliability

9 9

Existing Home Sales Overview – Quarterly data

• Single Family Median Prices by Metropolitan

Statistical Area (MSA) for approximately 150 MSAs

• Condominium Median Prices by Metropolitan

Statistical Area (MSA) for approximately 60 MSAs

• Metro-level Affordability Index

– Qualifying Income by MSA

– Affordability Index by MSA

10 10

Pending Home Sales

• Pending sales are those identified by MLSs as

“pending,” typically under contract

– Total pending counts in the MLS or

– Newly pending that occurred during the month

• Pending home sales data is reported as an index

11 11

Periodic Revisions

– Validate private industry source with other outside,

preferably with public data

– Changes to For-Sale-By-Owner home sales

– Flipping of a home (re-sell within 12 months)

• Re-benchmarked figure excludes the second sale,

while they are counted as twice in MLS count

– Enlarged MLS geographic coverage

• Some of the home sales are not an increase in

home sales but are just due to enlarged sampled

areas

12 12

Last Revision

Annual Figures – Old and New

0

1000

2000

3000

4000

5000

6000

7000

8000

19

81

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

19

98

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

old

new

13 13

What was Revised?

• No Revision to Median Home Price

• No Revision to Months Supply of Inventory

• Downward Revision to Home Sales

• Downward Revision to Inventory

• No Changes to Reported Financial Statements by Brokerages

• No Changes to Homeownership Rate

• No Changes to Local MLS data on Sales and Prices

• No Changes to Mortgage Default and Foreclosure

• No Changes to Underwater Status

14 14

Home Sellers and Their Experience

Exhibit 6-27

METHOD USED TO SELL HOME, 2001-2011

(Percentage Distribution)

2001 2003 2004 2005 2006 2007 2008 2009 2010 2011

Sold home using an agent or

broker 79% 83% 82% 85% 84% 85% 84% 85% 88% 87%

For-sale-by-owner (FSBO) 13 14 14 13 12 12 13 11 9 10

Sold to home buying company 1 1 1 1 1 1 1 1 1 1

Other 7 3 3 2 3 2 2 3 3 2

Source: NAR Home Buyer and Seller Survey

15 15

Future Rebenchmark Plans

• Rebenchmark as better source of data becomes

more readily available or due to notable data drift

– Courthouse Data LPS, CoreLogic, DataQuick

• Realtor Property Resource® (RPR)

– Utilizing detailed property level data of both

deeds records and MLS information as potential

future source

• Exploring the Development of Repeat-Price Index

using Timely MLS data

16

Home Builder Data

David Crowe

Chief Economist

Urban Institute

December 9, 2013

17

New Home Sales

18

New Home Sales

Collected by Census Bureau, funded by HUD

Released roughly 17th working day of month

Sample is roughly1 in 50 new homes

From list of building permits and canvassing in non-permit areas (<2%)

Four types (only 1st is included):

– houses built for sale (whether sold or not) where the house and land are sold as a package

– contractor-built houses where the owner of the land hires a general contractor to build the house

– owner-built houses where the owner of the land builds the house him/herself or acts as the general

contractor

– houses built for rent

Each month also includes revisions to previous 3 months

Each April revisions to 27 months SA data

Signed contract moment (similar to NAR pending home sale)

19

New Home Sales History (000s)

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

0

200

400

600

800

1,000

1,200

1,400

Jan

-63

Dec

-64

No

v-6

6

Oct

-68

Sep

-70

Au

g-7

2

Jul-

74

Jun

-76

May

-78

Ap

r-8

0

Mar

-82

Feb

-84

Jan

-86

Dec

-87

No

v-8

9

Oct

-91

Sep

-93

Au

g-9

5

Jul-

97

Jun

-99

May

-01

Ap

r-0

3

Mar

-05

Feb

-07

Jan

-09

Dec

-10

No

v-1

2

20

New Home Sales Confidence

Interval – July to August 2013

23%

56%

68%

44%

16%

-7%

-38%

-28%

-14%

-45%

8% 9%

20% 15%

-15%

-40%

-20%

0%

20%

40%

60%

US NE MW SO WE

21

Home Sales (000s)

0

200

400

600

800

1,000

1,200

1,400

1,600

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Jan

-68

No

v-6

9

Sep

-71

Jul-

73

May

-75

Mar

-77

Jan

-79

No

v-8

0

Sep

-82

Jul-

84

May

-86

Mar

-88

Jan

-90

No

v-9

1

Sep

-93

Jul-

95

May

-97

Mar

-99

Jan

-01

No

v-0

2

Sep

-04

Jul-

06

May

-08

Mar

-10

Jan

-12

Existing Home Sales (L) New Home Sales (R)

22

New Home Sales and NAHB HMI

0

10

20

30

40

50

60

70

80

90

100

0

200

400

600

800

1,000

1,200

1,400

1,600

Jan

'85

Dec

No

v

Oct

Sep

Au

g

Jul

Jun

May

Ap

r

Mar

Feb

Jan

'96

Dec

No

v

Oct

Sep

Au

g

Jul

Jun

May

Ap

r

Mar

Feb

Jan

'07

Dec

No

v

Oct

Sep

Au

g

Jul

Jun

New Home Sales (L) HMI Expected Sales (R)

(000s)

23

Housing Opportunity Index

24

NAHB/Wells Fargo Housing

Opportunity Index

The share of homes recently sold affordable to median income

Affordability for 250+ MSAs

Quarterly since 1991

Recent sales from CoreLogic

Income from HUD

Interest rate fro FHFA

30 year fixed rate mortgage, 28% of income to PITI, 10% down payment, local taxes and insurance from ACS

www.nahb.org/hoi

25

NAHB/Wells Fargo Housing

Opportunity Index

40

78

65

40

45

50

55

60

65

70

75

80

Q1

92

Q3

93

Q1

95

Q3

96

Q1

98

Q3

99

Q1

01

Q1

04

Q3

05

Q1

07

Q3

08

Q1

10

Q3

11

Q1

13

26

Large Metro Ranks

10 Most Affordable Metro Areas 10 Least Affordable Metro Areas

1 Indianapolis-Carmel, IN 1 San Francisco-San Mateo-Redwood City, CA ^^^

1 Syracuse, NY 2 Los Angeles-Long Beach-Glendale, CA ^^^

3 Youngstown-Warren-Boardman, OH-PA 3 Santa Ana-Anaheim-Irvine, CA ^^^

4 Harrisburg-Carlisle, PA 4 New York-White Plains-Wayne, NY-NJ ^^^

5 Buffalo-Niagara Falls, NY 5 San Jose-Sunnyvale-Santa Clara, CA

6 Lakeland-Winter Haven, FL 6 San Diego-Carlsbad-San Marcos, CA

7 Scranton--Wilkes-Barre, PA 7 Oxnard-Thousand Oaks-Ventura, CA

8 Wichita, KS 8 Oakland-Fremont-Hayward, CA ^^^

9 Toledo, OH 9 Bridgeport-Stamford-Norwalk, CT

10 Cincinnati-Middletown, OH-KY-IN 10 Honolulu, HI

27

Small Metro Ranks

10 Most Affordable Metro Areas 10 Least Affordable Metro Areas

1 Kokomo, IN 1 Santa Cruz-Watsonville, CA

2 Vineland-Millville-Bridgeton, NJ 2 San Luis Obispo-Paso Robles, CA

3 Davenport-Moline-Rock Island, IA-IL 3 Santa Rosa-Petaluma, CA

4 Bay City, MI 4 Napa, CA

5 Springfield, OH 5 Salinas, CA

6 Dover, DE 6 Santa Barbara-Santa Maria-Goleta, CA

7 Monroe, MI 7 Laredo, TX

8 Salisbury, MD 8 Barnstable Town, MA

9 Cumberland, MD-WV 9 Ocean City, NJ

10 Fairbanks, AK 10 Bend, OR

28 28

NAR Data

Affordability Index

29 29

Falling Affordability to 5-year Low

But still 5th best in 40 years

0

50

100

150

200

250

19

71

- J

an

19

73

- J

an

19

75

- J

an

19

77

- J

an

19

79

- J

an

19

81

- J

an

19

83

- J

an

19

85

- J

an

19

87

- J

an

19

89

- J

an

19

91

- J

an

19

93

- J

an

19

95

- J

an

19

97

- J

an

19

99

- J

an

20

01

- J

an

20

03

- J

an

20

05

- J

an

20

07

- J

an

20

09

- J

an

20

11

- J

an

20

13

- J

an

30 30

Housing Affordability Index

• Component Factors:

1) median sales price; 2) mortgage rate; 3) median

family income

• Ratio of Qualifying Income to Median Income

• Index interpretation:

Index=100 when median family income qualifies for

an 80% mortgage on a median priced existing

single-family home. Index > 100 indicates that

more than half of buyers can afford to purchase a

median-priced home.

• The higher the index, more can buy

31 31

Median Family Income

40000

45000

50000

55000

60000

65000

700002

00

0 -

Jan

20

00

- J

ul

20

01

- J

an2

00

1 -

Ju

l2

00

2 -

Jan

20

02

- J

ul

20

03

- J

an2

00

3 -

Ju

l2

00

4 -

Jan

20

04

- J

ul

20

05

- J

an2

00

5 -

Ju

l2

00

6 -

Jan

20

06

- J

ul

20

07

- J

an2

00

7 -

Ju

l2

00

8 -

Jan

20

08

- J

ul

20

09

- J

an2

00

9 -

Ju

l2

01

0 -

Jan

20

10

- J

ul

20

11

- J

an2

01

1 -

Ju

l2

01

2 -

Jan

20

12

- J

ul

20

13

- J

an2

01

3 -

Ju

l

32 32

30-yr fixed mortgage rate

3

4

5

6

7

8

9

20

00

- J

an2

00

0 -

Ju

l2

00

1 -

Jan

20

01

- J

ul

20

02

- J

an2

00

2 -

Ju

l2

00

3 -

Jan

20

03

- J

ul

20

04

- J

an2

00

4 -

Ju

l2

00

5 -

Jan

20

05

- J

ul

20

06

- J

an2

00

6 -

Ju

l2

00

7 -

Jan

20

07

- J

ul

20

08

- J

an2

00

8 -

Ju

l2

00

9 -

Jan

20

09

- J

ul

20

10

- J

an2

01

0 -

Ju

l2

01

1 -

Jan

20

11

- J

ul

20

12

- J

an2

01

2 -

Ju

l2

01

3 -

Jan

20

13

- J

ul

%

33 33

Rising Home Prices (% change from one year ago)

-25

-20

-15

-10

-5

0

5

10

15

20

20

01

- J

an

20

01

- J

ul

20

02

- J

an

20

02

- J

ul

20

03

- J

an

20

03

- J

ul

20

04

- J

an

20

04

- J

ul

20

05

- J

an

20

05

- J

ul

20

06

- J

an

20

06

- J

ul

20

07

- J

an

20

07

- J

ul

20

08

- J

an

20

08

- J

ul

20

09

- J

an

20

09

- J

ul

20

10

- J

an

20

10

- J

ul

20

11

- J

an

20

11

- J

ul

20

12

- J

an

20

12

- J

ul

20

13

- J

an

20

13

- J

ul

Blue = NAR Median Price Red = Case-Shiller Index

34 34

NAR Data

REALTOR Survey Data

35 35

REALTORS® Confidence Index

• Monthly survey of REALTORS® providing information on residential market conditions and outlook

• Random, on-line survey

• Approximately 3,000 responses each month

36 36

Questionnaire

Market Conditions.

• Current Conditions Confidence Index for SF, Condo.

• Six Months Ahead Confidence Index for SF, Condo.

• Buyer and Seller Traffic Index.

• Distressed Sales – Volume, Price Discounts, Property Condition.

• Time on Market.

Buyer and Seller Characteristics.

• Cash/Non-cash.

• Type of Buyer – First Time, Investor

Current Issues

• Special Questions—e.g., impacts of government shutdown, etc.

37 37

All-Cash Buyers Stayed High … even when mortgages were cheap

(Cash share as % of total home sales)

0%

5%

10%

15%

20%

25%

30%

35%

40%2

00

8 -

Oct

20

09

- J

an

20

09

- A

pr

20

09

- J

ul

20

09

- O

ct

20

10

- J

an

20

10

- A

pr

20

10

- J

ul

20

10

- O

ct

20

11

- J

an

20

11

- A

pr

20

11

- J

ul

20

11

- O

ct

20

12

- J

an

20

12

- A

pr

20

12

- J

ul

20

12

- O

ct

20

13

- J

an

20

13

- A

pr

20

13

- J

ul

Normal Range

38 38

Buyer and Seller Traffic How Much from Gov’t Shutdown and Dysfunction?

0

10

20

30

40

50

60

70

80

20

08

- J

an

20

08

- A

pr

20

08

- J

ul

20

08

- O

ct

20

09

- J

an

20

09

- A

pr

20

09

- J

ul

20

09

- O

ct

20

10

- J

an

20

10

- A

pr

20

10

- J

ul

20

10

- O

ct

20

11

- J

an

20

11

- A

pr

20

11

- J

ul

20

11

- O

ct

20

12

- J

an

20

12

- A

pr

20

12

- J

ul

20

12

- O

ct

20

13

- J

an

20

13

- A

pr

20

13

- J

ul

Buyer Seller

39

NAHB Surveys

40

NAHB Builders Surveys

Housing Markets

Single-family (monthly since 1984)

Multifamily (quarterly since 2003)

Remodeling (quarterly since 2001)

55+ (quarterly since 2008)

Leading Markets Index

41

NAHB/Wells Fargo Housing

Market Index

Released monthly on day before starts

Survey in first 10 days of month

Same questions on

Current sales (good, fair, poor),

Expected sales over next 6 months (good, fair, poor)

Traffic (high/very high, average, low/very low)

Diffusion index based from 0 to 100 (good - poor, divide by 2 and add 50) (after seasonal adjustment)

National and four census regions

42

NAHB/Wells Fargo Housing

Market Index

72

54

0

10

20

30

40

50

60

70

80

90

100

0

10

20

30

40

50

60

70

80

90

Jan

'85

Dec

No

v

Oct

Sep

Au

g

Jul

Jun

May

Ap

r

Mar

Feb

Jan

'96

Dec

No

v

Oct

Sep

Au

g

Jul

Jun

May

Ap

r

Mar

Feb

Jan

'07

Dec

No

v

Oct

Sep

Au

g

Jul

Jun

43

NAHB HMI & Single-family Starts

0

10

20

30

40

50

60

70

80

90

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

Jan

'85

Jan

'87

Jan

'89

Jan

'91

Jan

'93

Jan

'95

Jan

'97

Jan

'99

Jan

'01

Jan

'03

Jan

'05

Jan

'07

Jan

'09

Jan

'11

Jan

'13

SF Starts (L) HMI (R)

(000s)

44

NAHB Multifamily Housing

Market Index

Quarterly 1 ½ month after end of quarter

Production and vacancy indexes

Production index:

Stronger, same, weaker for

low income, market rate and condo markets

Vacancy index:

Higher, same, lower for

Class A, B and C

Diffusion index

45

Multifamily Housing Market Index

- Production

0

10

20

30

40

50

60

70

5

55

105

155

205

255

305

355

405

Mar

-03

Au

g-0

3

Jan

-04

Jun

-04

No

v-0

4

Ap

r-0

5

Sep

-05

Feb

-06

Jul-

06

Dec

-06

May

-07

Oct

-07

Mar

-08

Au

g-0

8

Jan

-09

Jun

-09

No

v-0

9

Ap

r-1

0

Sep

-10

Feb

-11

Jul-

11

Dec

-11

May

-12

Oct

-12

Mar

-13

MF starts (L) Production Index (R)

(000s)

46

Multifamily Housing Market Index

- Vacancy

5

15

25

35

45

55

65

75

5

6

7

8

9

10

11

12

13

14

1-M

ar-0

3

1-A

ug-

03

1-J

an-0

4

1-J

un

-04

1-N

ov-

04

1-A

pr-

05

1-S

ep

-05

1-F

eb

-06

1-J

ul-

06

1-D

ec-0

6

1-M

ay-0

7

1-O

ct-0

7

1-M

ar-0

8

1-A

ug-

08

1-J

an-0

9

1-J

un

-09

1-N

ov-

09

1-A

pr-

10

1-S

ep

-10

1-F

eb

-11

1-J

ul-

11

1-D

ec-1

1

1-M

ay-1

2

1-O

ct-1

2

1-M

ar-1

3

1-A

ug-

13

Census Vacancy Rate (L) NAHB Vancacy Index (R)

47

Remodeling Market Index

Current market conditions

Major additions & alterations for owners and renters

Minor additions & alterations for owners and renters

Maintenance & repair for owners and renters

Future market conditions

Calls for bids for owners and renters

Committed work in next 6 months for owners and renters

Backlog of committed jobs

Appointments for proposals

Diffusion index using: higher, about the same, lower ratings

48

Remodeling Market Indexes

15

20

25

30

35

40

45

50

55

60

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

RMI Current conditions Future conditions

49

NAHB/First American Leading

Markets Index

Progress toward normality

Compare most recent 12 months levels to ‘normal’ year

Single-family permits from Census- last normal 2000-2003

House price index from Freddie Mac - last normal 2000-2003

Employment from BLS – last normal 2007

Index is average of three ratios

Monthly on fourth working day

All 360+ MSAs

50

NAHB/First American Leading

Markets Index

0.85

0.6

0.7

0.8

0.9

1

1.1

1.2

1.3

01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 11 12 12 13 13

51

NAHB/First American Leading

Markets Index

Rank Oct-2013

Bottom 20%

20% to 40%

40% to 60%

60% to 80%

Top 20%

Relative

to Normal

< 74%

74% - 81%

81% - 87%

87% - 97%

97% <

52

Questions?

Answers:

www.housingeconomics.com

eyeonhousing.org

dcrowe@nahb.org

52