Naea 10-13
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Transcript of Naea 10-13
KCM Divided into Three Sections
4,000,000
4,500,000
5,000,000
5,500,000
Existing Home Sales
"It seems like Americans' love affair with real estate
has returned."
Greg McBride Bankrate.com's senior financial analyst
Bankrate.com 8/2013
Top 5 Reasons Americans Buy a Home
Fannie Mae
A better place to raise their children
A place their family can feel safe
Ability to have more space
Freedom to renovate to their taste
Owning is a better investment
Owning is still…
Homeownership remains cheaper than renting in all of the 100 largest metro areas
Trulia 9/2013
than renting35%Cheaper
RETURN ON INVESTMENTJanuary 2000 – September 2013
MSN Money.com, Case Shiller
RETURN ON INVESTMENT
MSN Money.com, Case Shiller
The Last Twelve Months
$77,300
$47,500
$29,800
Total Wealth Home Equity Other Assets
Breakdown of the American Family’s
Net Worth
Federal Reserve 2012
Federal Reserve 2012
61.4%
38.6%Home Equity
Other Assets
Breakdown of the American Family’s
Net Worth
Federal Reserve 2012
OVER 30X greaterthan renters
Homeowners Net Worth…
$174,500
$5,100
Homeowner Renter
An American Family’s
Net Worth
Federal Reserve 2012
The two best ways to invest money not needed for more than 10 years
CASH REAL ESTATE
Bankrate.com 8/2013
55% 65%
9%
6%
36% 29%
All Americans Upper Middle Class Households
Prices Going Up Prices Falling Remain the Same/Not Sure
Home Prices over the Next 12 Months
Window of
OPPORTUNITY
ta·perˈtāpər/Verb – to diminish or reduce
30 Year Fixed Rate
Freddie Mac 9/2013
Recent Rate Movement
“If the data confirms our basic outlook, then we could
move later this year.”
Ben BernankeChairman of the Fed
Mortgage Rate Projections
Analyst Projected Rate 4Q 2014
Fannie Mae 5.3%
National Assoc of Realtors 5.5%
Freddie Mac 5.2%
Mortgage Bankers Assoc 5.1%
9/2013
Mortgage Interest RatePayment
(P&I)
Today $250,000 4.22% 1,225.46
Next Year $250,000 5.3% 1,388.26
Monthly Difference $162.80
Buyer’s Purchasing Power
What About the Move-Up Seller?
“8.3 million homeowners are on the equity fence, and should have at least 20% equity in the next
15 months… If 5% of these 8.3 million homeowners list their homes for sale, that’s an
additional 415,000 homes that will be available for sale in the coming months.”
Daren BlomquistVice President of RealtyTrac
HousingWire 8/2013
Yanling Mayer Director of Research, FNC Inc.
HousingWire 8/2013
“In the meantime, higher home prices are bringing out trade-up demand
from existing homeowners who are experiencing rising home equity,
which supports a down payment on their next bigger house.”
Months Inventory of Homes for Sale
NAR 9/2013
5-6 Months = Normal Market Inventory
S&P Case Shiller 9/2013
Year-over-Year Change in Prices
“This rapid growth is not normal and cannot and should not be expected to last. We are already beginning to see
moderation in the monthly pace of home value appreciation, which will be good for the market overall and in the long
term.”
Stan HumphriesZillow Chief Economist
Zillow 9/2013
30 Year Fixed Rate Mortgage HistoryJanuary 2012 – October 2013
Federal Reserve 9/2013
90
95
100
105
110
115
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug
Pending Home Sales
NAR 9/2013
100 = Historically Healthy Level
Months Inventory of Homes for Sale
NAR 9/2013
5-6 Months = Normal Market Inventory
NAR 92013
Percentage of Distressed Property Sales
35%
12%
S&P Case Shiller 9/2013
S&P Case-Shiller Home Price Indices
How will budgets change in 2014?
marketingsherpa 9/2013
Top 5 Reasons Americans Buy a Home
Fannie Mae
A better place to raise their children
A place their family can feel safe
Ability to have more space
Freedom to renovate to their taste
Owning is a better investment
Owning is still…
Homeownership remains cheaper than renting in all of the 100 largest metro areas
Trulia 9/2013
than renting35%Cheaper
Breakdown of the American Family’s
Net Worth
Federal Reserve 2012
Federal Reserve 2012
61.4%
38.6%Home Equity
Other Assets
Breakdown of the American Family’s
Net Worth
Federal Reserve 2012
OVER 30X greaterthan renters
Homeowners Net Worth…
An American Family’s
Net Worth
Federal Reserve 2012
Resources
KEEPINGCURRENTMATTERS.COM
Slide Slide Title Link
6Greg McBrideBankRate.com
http://phx.corporate-ir.net/phoenix.zhtml?c=61502&p=irol-newsArticle&ID=1856909&highlight=
7 Top 5 Reasons Americans Buy a Home http://www.federalreserve.gov/pubs/bulletin/2012/pdf/scf12.pdf
8 Owning is still… http://trends.truliablog.com/2013/09/rent-vs-buy-summer-2013/
9, 10 Return on Investment http://www.spindices.com/index-family/real-estate/sp-case-shiller
11, 12, 13, 14
Breakdown of the American Family’s Net Worth
http://www.federalreserve.gov/pubs/bulletin/2012/pdf/scf12.pdf
15, 16The 2 Best Ways to Invest, Home Prices Over the Next 12 Months
http://phx.corporate-ir.net/phoenix.zhtml?c=61502&p=irol-newsArticle&ID=1856909&highlight=
19 Recent Rate Movement http://www.freddiemac.com/pmms
21 Mortgage Rate Projections
http://www.mortgagebankers.org/files/Bulletin/InternalResource/84813_.pdfhttp://www.freddiemac.com/news/finance/docs/Jun_2013_public_outlook.pdfhttp://www.realtor.org/sites/default/files/reports/2013/embargoes/phs-6-27-hgbfjnv/july-2013-outlook-2013-6-27.pdfhttp://www.fanniemae.com/resources/file/research/emma/pdf/Housing_Forecast_061313.pdf
24 Daren Blomquist Quote http://www.housingwire.com/articles/26818-move-up-buying-activity-rises-with-home-equity-gains
25 Yanling Mayer Quote http://www.fncrpi.com/press_releases.aspx?pr=69
Resources
Slide Slide Title Link
26 Months Inventory of Homes for Sale http://www.realtor.org
28 Stan Humphries Quote http://www.zillowblog.com/2013-09-22/u-s-home-values-continue-to-surge-in-august-pace-expected-to-slow-as-summer-season-ends/
30 30 Year Fixed Rate Mortgage History http://www.freddiemac.com/pmms
31, 32, 33
Pending Home Sales, Months Inventory, Distressed Properties
http://www.realtor.org
34 S&P Case-Shiller Home Price Indices https://www.spice-indices.com/idpfiles/spice-assets/resources/public/documents/19529_cshomeprice-release-0730.pdf?force_download=true
36 How will budgets change in 2014? http://www.marketingsherpa.com/article/chart/tactics-budget-2014-investment
37 Jennifer Listens Blog http://jenniferlistens.wordpress.com
KEEPINGCURRENTMATTERS.COM
PRIVATEBUSINESS
COLLEGE EDUCATION
