National Housing Market Outlook

National Real Estate Market
FEBRUARY 2019
Scott Rodgers, REALTOR® www.ThePeak.com

“The spring homebuying season
is almost upon us, and if rates stay
lower, inventory continues to grow,
and the job market maintains its
strength, we do expect to see a
solid spring market.”
Mike Fratantoni
Chief Economist at MBA

HOUSING SUPPLY
Year-Over-Year
-9.5%
-8.1%
-7.2%
-6.3% -6.1%
0.5%
0.0%
2.7%
1.1%
2.8%
4.2%
6.2%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
NAR 1/2019
Last 12 Months
Jun Jul Aug Sep Oct Nov Dec

4.03
4.33
4.44
4.46
4.58 4.57
4.52
4.55
4.62
4.83
4.86
4.63
4.46
Jan 2018 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan 2019
Freddie Mac 1/2019
2018 Mortgage Rates
Freddie Mac 30-Year Fixed Rate

“The housing market is obviously very
sensitive to mortgage rates. Softer sales
in December reflected consumer search
processes and contract signing activity in
previous months when mortgage rates were
higher than today. Now, with mortgage
rates lower, some revival in home sales is
expected going into spring.”
Lawrence Yun
Chief Economist at NAR

“There are strong reasons to believe that the
housing market is more responsive to changes in
interest rates than in the past – accelerating when
rates drop and slowing when rates rise. Mortgage
rates hit seven-year highs in November but then
fell back in December. If they remain low during
the early months of 2019, the housing market
could see a modest reacceleration.”
Aaron Terrazas
Zillow Senior Economist

“Total home sales are expected to slowly
regain momentum, increasing to 6.09
million in 2019 and to 6.14 million in
2020. For 2019, we expect home sales
growth to be mostly driven by existing
home sales, while new home sales are
expected to remain almost flat.”
Freddie Mac

“We believe that the best home price
growth is likely in the rearview mirror
and the market is likely to skew toward
transaction growth, which should
ultimately provide a more stable
foundation for affordability and the
housing market.”
Ivy Zelman
The Z Report

Source 2019 2020
Home Price Expectation Survey +3.8 +2.5
Zelman & Associates +3.5 +3.3
Mortgage Bankers Association +4.5 +3
Freddie Mac +4.1 +2.7
National Association of Realtors +2.2 +3.2
Fannie Mae +4.2 +2.8
Projected Home Price % Appreciation Going Forward

Housing & Mortgage Market Review
The Probability of Home Prices
being Lower in 2 Years

“The biggest challenge
is really the availability
of supply.”
Mark Fleming
First American Chief Economist

Q: When do most listings
come on the market?
A: The 2nd Quarter of each Year

1,720,000
1,700,000 1,690,000
1,660,000
1,630,000
1,530,000
1,360,000
June July August September October November December
NAR
Number of Single Family Listings

3.4 3.4
3.5
3.9
4.2
4.3 4.3 4.3 4.3
4.2
3.9
3.7
January February March April May June July August September October November December
NAR
Inventory Levels
Months Supply

“Approximately one-third (32%) of
Americans plan to purchase a home in
the next five years. Millennials are most
likely to have such a purchase in their
five-year plan (49%), versus 35% of
Generation X and 17% of baby
boomers.”
NerdWallet

52%
49%
46%
43%
32%
20%
Rising Rental Costs Feeling like I’m
throwing my money
away
Not building equity Not feeling like it’s
truly home
Feeling like I’m paying
my landlord’s
mortgage
Not being allowed to
have pets
What Do You Dislike About
Renting?
Convergys Analytics Insights Report

of renters believe you need a
20% down payment
to buy a home

of renters believe you need a
780-800 credit score
to be considered for a mortgage

0.09% 0.9%
9.1%
18.7%
24.2%
34.0%
13.0%
500-549 550-599 600-649 650-699 700-749 750-799 800+
FICO® Score
Distribution
53.0% All Closed Loans as per Ellie Mae

47% 47%
36%
34%
26%
Mature/Responsible Like an Adult Independent Established Empowered
How Does Buying A Home
Make You Feel?

“From our perspective, additional
inventory is a good thing... However,
homebuyers dislike uncertainty more
than most things, and the transition
period from inventory being too tight to
inventory rising has indeed added
uncertainty to the market.”
Ivy Zelman
The Z Report

“My best guess is the housing market really
comes into a soft landing… It depends on
whether buyers & sellers start to panic as the
market continues to slow, especially given how
fresh the memories of the 2008 crash are.
Markets often follow animal spirits or
psychology. Sometimes a soft
landing is perceived as a crash.”
Ralph McLaughlin
CoreLogic’s Deputy Chief Economist

“The content you push out serves as an
example of your expertise - something
proving that you know your stuff.
Unless you’re consistently sharing your
unique knowledge with potential clients
in the form of blogs, real estate videos or
other content types, you’ll never
establish yourself as an authority.”
Tonya Eberhart & Michael Carr
Co-Founders of BrandFace

“Content Matters!
Context Matters!
Keeping Current
Matters!”
Steve Harney
Founder of KCM

“I truly believe that the silly, stupid,
non contextual, conversational
content agents send clients, whittle
down their value over time. Doing
what Steve suggests however, will
build and maintain value. Tenfold.
The right content matters! ”
Marc Davison
Co-Founder of 1000watt

Resources
Slide Slide Title Link
3 Mike Fratantoni Quote https://www.cnn.com/2019/01/17/investing/housing-market-mortgage-rates-homebuilders/index.html
4, 14-15 Housing Supply https://www.nar.realtor/topics/existing-home-sales
5 Mortgage Rates by Month http://www.freddiemac.com/pmms
6 Lawrence Yun Quote https://www.nar.realtor/newsroom/existing-home-sales-see-64-percent-drop-in-december
7 Aaron Terrazas Quote http://zillow.mediaroom.com/2019-01-10-Interest-Rates-More-Severely-Impacting-Home-Values-but-Not-First-Time-Buyers-According-to-Experts
8 Freddie Mac Quote http://www.freddiemac.com/research/pdf/January_Forecast_Press_Release.pdf
9, 22 Ivy Zelman Quote
https://www.zelmanassociates.com/member-portal/z-report-member-site/no-government-data-no-problem-our-updated-
take-o (subscription required)
10 Projected Home Price Growth
www.freddiemac.com, www.fanniemae.com, www.nar.realtor/, www.pulsenomics.com, www.mba.org,
www.zelmanassociates.com (subscription required)
11 Probability of Prices Going Down https://mi.archcapgroup.com/hammr
12 Mark Fleming Quote https://blog.firstam.com/economics/interview-on-cnbc-discussing-the-2019-housing-market-outlook
16 Nerd Wallet Quote https://www.nerdwallet.com/blog/2018-home-buyer-report/
17-19, 21 Convergys Analytics Report https://info.bankofamerica.com/homebuyers-report/
20 FICO Scores http://www.elliemae.com/resources/origination-insight-reports
23 Ralph McLaughlin Quote www.wsj.com (subscription required)
24-26 Quotes re: KCM
https://www.inman.com/2019/01/25/the-7-deadly-sins-of-real-estate-brand-building/
https://mobile.twitter.com/1000wattmarc/status/1088489500324519936
KEEPINGCURRENTMATTERS.COM

Resources
Slide Slide Title Link
31, 52, 62
Average Days on Market,
Buyer & Seller Traffic Maps
https://www.nar.realtor/reports/realtors-confidence-index
32-33, 42, 44-
45, 53-58
Existing Home Sales Report http://nar.realtor/
34-35, 39 Freddie Mac Home Sales
http://www.census.gov/construction/nrs/pdf/newressales.pdf
http://nar.realtor/
36-38, 59-60 New Home Sales, Inventory http://www.census.gov/construction/nrs/pdf/newressales.pdf
40-41 Pending Home Sales Report http://nar.realtor/
46-48 Case Shiller Price Index http://us.spindices.com/indices/real-estate/sp-case-shiller-20-city-composite-home-price-index
49 Forecasted Change in Price http://www.corelogic.com/about-us/researchtrends/corelogic-home-price-insights.aspx
50 Appraisal Challenge
https://www.quickenloans.com/press-room/2019/01/08/quicken-loans-study-less-than-half-a-percent-difference-between-owner-and-appraiser-
opinions-of-home-values/
63-65 Foot Traffic http://nar.realtor/
67-68, 70-71 Freddie Mac Rates http://www.freddiemac.com/pmms
69 Mortgage Rate Projections
http://www.freddiemac.com/research/forecast/20190129_economic_growth.html
http://www.fanniemae.com/resources/file/research/emma/pdf/Housing_Forecast_012219.pdf
https://www.mba.org/Documents/Research/Mortgage%20Finance%20Forecast%20Jan%202019.pdf
https://www.nar.realtor/sites/default/files/documents/forecast-01-2019-us-economic-outlook-12-28-2018.pdf
73-74 Mortgage Credit Availability https://www.mba.org/news-research-and-resources/research-and-economics/single-family-research/mortgage-credit-availability-index
75-79 Ellie Mae Report https://assets.contentstack.io/v3/assets/blt47a327ac368e22cd/blta8f5841071fa3534/5c475ee5a007329c0f28a139/EM_OIR_DECEMBER2018_180096.pdf
KEEPINGCURRENTMATTERS.COM

Average Days on the Market
NAR

Jan 2014 Jan 2015 Jan 2016 Jan 2017 Jan 2018
Since January 2014
EXISTING
Home Sales
NAR 1/2019

-10.3%
-6.8%
-10.5%
-8.7%
-15.0%
U.S. Northeast Midwest South West
Y-O-Y by region
EXISTING Home Sales
NAR 1/2019

Existing Home Sales
in thousands
Census & NAR
2017 2018

Census & NAR
2017 2018
New Home Sales in thousands
*Data release has been impacted by the Government Shutdown –
We will update as the data becomes available

Jun-14 Jan-15 Jan-16 Jan-17 Jan-18
Census
New Home Sales
annualized in thousands
*Data release has been impacted by the Government Shutdown

6%
8%
36%
23%
12%
9%
7%
Under $150K $150-$199K $200-299K $300-$399K $400-$499K $500-$749K Over $750K
Census
New Home Sales
% of sales by price range

3.2
3.3
3.2
3.4
3.6
3.7
3.1
2.9
2.8
3.1
3.2 3.2
3.4
3.2
3.3
3.7
3.9
3.8
3.7
3.3
3.2
2.9 2.9
2.7
Nov Dec Jan-17 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan-18 Feb Mar Apr May Jun Jul Aug Sep Oct
Census
New Homes Selling Fast
(median months from completion to sold)

Census & NAR
364 366
516
503
612
656
561
580
512 507
475 472
361 373
500
521
597
626
575 585
461
2017 2018
Total Home Sales in thousands

-9.8%
-2.5%
-7.2%
-13.5%
-10.8%
PENDING
Home Sales
Year-Over-Year By Region
NAR 2/2019

Jan 2012 Jan 2013 Jan 2014 Jan 2015 Jan 2016 Jan 2017 Jan 2018
Percentage of
Distressed Property
Sales
35%
January 2012 - Today
2%
5%
NAR 1/2019

2.9%
8.2%
0.0%
2.5%
0.2%
Y-O-Y by region
EXISTING
Home Prices
NAR 1/2019

-19.6%
-11.9%
-6.4%
-8.0%
-6.3%
-13.3%
$0-100K $100-250K $250-500K $500-750K $750K-1M $1M+
% -19.6% -11.9% -6.4% -8.0% -6.3% -13.3%
% Change in Sales
from last year by Price Range
NAR 1/2019

Year-Over-Year
PRICE
CHANGES
Case Shiller
S&P Case Shiller 2/2019
Jun 2012 Jan 2013 Jan 2014 Jan 2015 Jan 2016 Jan 2017 Jan 2018

Year-Over-Year PRICE CHANGES
20CityComposite
Case Shiller

6.3%
6.4%
6.3%
6.7% 6.7%
6.5%
6.2%
6.0%
5.7%
5.5%
5.3%
5.2%
Dec Jan 2018 Feb Mar Apr May Jun Jul Aug Sep Oct Nov
Year-Over-Year PRICE CHANGES
20CityComposite
Case Shiller

CoreLogic
Forecasted Year-Over-Year % Change in Price

-0.60
-0.53
-0.36
-0.33 -0.34
-0.25
-0.28 -0.28 -0.29 -0.28
-0.36
-0.45
Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
% -0.6 -0.53 -0.36 -0.33 -0.34 -0.25 -0.28 -0.28 -0.29 -0.28 -0.36 -0.45
Quicken Loans
Appraiser Home Value Opinions
Compared to Homeowner Estimates
Last 12 Months

January
2011
January
2012
January
2013
January
2014
January
2015
January
2016
January
2017
January
2018
Months Inventory of
HOMES FOR SALE
2011 - Today
NAR 1/2019

Jan-17 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan-18 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Months Inventory of
HOMES FOR SALE
last 2 years
NAR 1/2019

3.4 3.4
3.6
4.0
4.1
4.3 4.3 4.3
4.4
4.3
3.9
3.7
NAR 1/2019
Months Inventory of HOMES FOR SALE
Last 12 Months

January 2014 January 2015 January 2016 January 2017 January 2018
% 7.3 5.3 3.2 6.5 6.0 5.5 5.8 4.5 6.0 5.2 5.0 -0. -0. -0. 2.0 -0. 1.8 0.4 -4. -1. -3. -4. -1. -3. -2. -1. -1. -3. -9. -5. -5. -10 -6. -10 -9. -6. -7. -6. -6. -9. -8. -7. -9. -6. -6. -10 -9. -11 -9. -8. -7. -6. -6. 0.5 0.0 2.7 1.1 2.8 4.2 6.2
Year-over-Year
Inventory Levels
NAR 1/2019

Jan FebMar AprMayJun Jul AugSep Oct NovDec Jan FebMar AprMayJun Jul AugSep Oct NovDec Jan FebMar AprMayJun Jul AugSep Oct NovDec Jan FebMar AprMayJun Jul AugSep Oct NovDec Jan FebMar AprMayJun Jul AugSep Oct NovDec Jan FebMar AprMayJun Jul AugSep Oct NovDec
% -24 -20 -16 -14 -13 -7. -5% -6. 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. -0. -0. 2.0 -0. 1.8 0.4 -4. -1. -3. -4. -1. -3. -2. -1. -1. -3. -9. -5. -5. -10 -6. -10 -9. -6. -7. -6. -6. -9. -8. -7. -9. -6. -6. -10 -9. -11 -9. -8. -7. -6. -6. 0.5 0.0 2.7 1.1 2.8 4.2 6.2
Year-over-Year
Inventory Levels
NAR 1/2019

5.2
5.1
5.0
5.4 5.4
5.3
6.0 6.0
5.3
5.6
4.9
5.5
5.6
5.4
5.3
5.7
5.5
6.0
6.2
6.4
6.5
7.4
Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec
2017
2018
Census
New Home Inventory
months supply

4.9
5.5 5.6
5.4 5.3
5.7
5.5
6.0
6.2
6.4 6.5
7.4
Nov Dec Jan-18 Feb Mar Apr May Jun Jul Aug Sep Oct
Census
New Home Inventory
months supply
Last 12 Months

Jul 2013 Jan 2014 Jan 2015 Jan 2016 Jan 2017 Jan 2018
Foot Trafficindicator of future sales
NAR 1/2019

Foot Traffic
indicator of future sales
Last 12 Months
NAR 1/2019

2017
2018
Foot Trafficindicator of future sales
NAR 1/2019

1/4 2/1 3/1 4/5 5/3 6/7 7/5 8/2 9/6 10/4 11/1 12/6 1/3
Freddie Mac 1/2019
Mortgage Rates
Freddie Mac 30-Year Fixed Rate
3.95%
4.45%

1/7/16
2/4
3/3
4/7
5/5
6/2
7/7
8/4
9/1
10/6
11/3
12/1
1/5/17
2/2
3/2
3/30
4/27
5/25
6/22
7/20
8/17
9/14
10/12
11/9
12/7
1/4/18
2/1
3/1
4/5
5/4
6/7
7/5
8/2
9/6
10/4
11/1
12/6
1/3
30-Year Fixed
Rate Mortgages
from Freddie Mac
4.45
3.97
Freddie Mac 1/2019

Mortgage Rate Projections
1/2019
Quarter
Freddie
Mac
Fannie
Mae
MBA NAR
Average
of All Four
2019 2Q 4.8 4.5 4.7 4.7 4.68
2019 3Q 4.8 4.5 4.8 4.8 4.73
2019 4Q 4.8 4.5 4.8 4.9 4.75
2020 1Q 4.8 4.5 4.9 - 4.73

2015
Q1
2015
Q2
2015
Q3
2015
Q4
2016
Q1
2016
Q2
2016
Q3
2016
Q4
2017
Q1
2017
Q2
2017
Q3
2017
Q4
2018
Q1
2018
Q2
2018
Q3
2018
Q4
2019
Q1
2019
Q2
2019
Q3
2019
Q4
Rate 3.7 3.8 4.0 3.9 3.7 3.6 3.5 3.8 4.2 4.0 3.9 3.9 4.3 4.6 4.6 4.8 4.6 4.8 4.8 4.8
Freddie Mac
Mortgage Rates
Freddie Mac
30-Year Fixed Rate
- Actual
- Projected
2015 2016 2017 2018 2019

4.6
4.8 4.8 4.8
Freddie Mac
2019 Q1
Where Are They
Going In 2019?
January – Today Actual
Interest Rates
2019 Q2 2019 Q3 2019 Q4
Mortgage Rates
Freddie Mac
30-Year Fixed Rate

Mortgage Credit Availability
YES NO MAYBE

Apr 2013 Jan 2014 Jan 2015 Jan 2016 Jan 2017 Jan 2018
MBA
Mortgage Credit Availability Index (MCAI), a report
from the Mortgage Bankers Association
Mortgage Credit
Availability

0
100
200
300
400
500
600
700
800
900
June 2004 June 2005June 2006 June 2007 June 2008 June 2009 June 2010 June 2011 June 2012 June 2013 June 2014 June 2015 June 2016 June 2017 June 2018 Dec 2018
Historic Data for the
MORTGAGE CREDIT
AVAILABILITY INDEX
(a report from the Mortgage Bankers Association)
MBA

47
45
43
42
43
44 44
45 45
46
48
47
Average Days To Close A Loan
All Closed Loans as per Ellie Mae
Last 12 Months

721 721
722
723
724
726
725
724
727 727 727
726
FICO® Score Requirements
Last 12 months

Average FICO® Score
for Closed Purchase Loans
by Loan Type
726
751
674
707
All Loans Conventional FHA VA

39 37
44 43
All Loans* Conventional FHA VA
Average Back End DTI
for Closed Purchase Loans by Loan Type

National Housing Market Outlook

Recommended

Recommended

More Related Content

What's hot

What's hot (15)

Similar to National Housing Market Outlook

Similar to National Housing Market Outlook (20)

Recently uploaded

Recently uploaded (20)

National Housing Market Outlook