Texas Mortgage Bankers Association

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Presented to the TMBA on 2/11/09 on the state of the Texas and US housing markets

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  • Texas Mortgage Bankers Association

    1. 1. The Current Status and Outlook for the U.S. and state of Texas Economies, Housing, and Mortgage Markets Specially Prepared for: The Texas Mortgage Bankers Association Southwest Secondary Marketing Conference Presented by: LaVaughn M. Henry, Ph.D. Director, U.S. Economic Analysis The PMI Group, Inc. February 11, 2009
    2. 2. <ul><li>The General Economy </li></ul><ul><li>The Housing Markets </li></ul><ul><li>The Mortgage Markets </li></ul><ul><li>Conclusion </li></ul>
    3. 3. Source: Bureau of Economic Analysis
    4. 4. Source: U.S. Census Bureau
    5. 5. Source: U.S. Conference Board
    6. 6. Thousands Percent Source: Bureau of Labor Statistics
    7. 7. Source: Bureau of Labor Statistics
    8. 8. Source: Bureau of Labor Statistics
    9. 9. Source: Federal Reserve Bank of Dallas
    10. 10. Current Status and Outlook
    11. 11. Source: NAR / U.S. Census Bureau U.S. Single Family Home Sales
    12. 12. Source: NAR / U.S. Census Bureau
    13. 13. Source: First American CoreLogic, LoanPerformance
    14. 14. <ul><li>Proprietary econometric model developed by The PMI Group, Inc. that estimates the probability that prices will fall in each of the nation’s 381 MSAs by the end of the next two years. </li></ul><ul><li>Based on OFHEO’s quarterly house price index for conventional, conforming loans. </li></ul><ul><li>Considers factors including price movement, housing affordability, local employment conditions, housing supply and foreclosures. </li></ul><ul><li>Utilizes more than 30,000+ observations of MSAs and quarterly combinations </li></ul><ul><li>All of the Model’s Primary Econometric Determinants are Statistically Significant at the 99% level or greater </li></ul>
    15. 15. What is the U.S. Market Risk Index Saying about Future Price Movements?
    16. 16. Historical Accuracy Rate of the PMI Risk Index Sample Period: 1 st Quarter 1985 – 3 rd Quarter 2006 Source: The PMI Group, Inc.
    17. 17. Source: The PMI Group, Inc.
    18. 18. Source: First American CoreLogic, LoanPerformance
    19. 19. Source: The PMI Group, Inc.
    20. 20. Source: The PMI Group, Inc.
    21. 21. Source: Mortgage Bankers Association
    22. 22. Source: BLS / The PMI Group, Inc.
    23. 23. Current Status and Outlook
    24. 24. Source: Federal Reserve Board Consumer Installment Credit
    25. 25. <ul><li>Prime Loans </li></ul><ul><li>Nontraditional Loans </li></ul><ul><li>Subprime Loans </li></ul>Source: Federal Reserve Board Senior Loan Officer Survey on Bank Lending Practices
    26. 26. Source: Mortgage Bankers Association
    27. 27. Source: Freddie Mac
    28. 28. Source: Freddie Mac
    29. 29. Source: Freddie Mac
    30. 30. <ul><li>The national economy remains at substantial risk of going deeper into recession </li></ul><ul><li>The Texas economy is likely to get weaker in the short run, but is unlikely to feel the full brunt of the national downturn </li></ul><ul><li>The housing market remains oversupplied and thus any substantial price recovery is unlikely in 2009 </li></ul><ul><li>The residential mortgage market has shown some recent signs of life, but remains at risk of getting worse if foreclosure issue remains unaddressed and credit remains tight. </li></ul>

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