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1. Economic Issues and Residential Real Estate Business Trends Forum NAR Midyear Meetings Washington, D.C. May 17, 2007 Lawrence Yun, Ph.D. Senior Economist NATIONAL ASSOCIATION OF REALTORS® All Real Estate is Local : Local Trends and Local Forecasts

2. Home Price Distribution (2006) Source: NAR

3. New York and Los Angeles Source: NAR $ thousand

4. Atlanta and Columbus Source: NAR $ thousand

5. Orlando and Providence Source: NAR $ thousand

6. Local Markets Are All Different Source: NAR $ thousand

7. Typical U.S. Home Price Source: NAR Ten-fold increase over 38 years for the U.S. What multiple in your local area?

8. Soft or Hard Landing? Source: NAR, Dow Jones, NASDAQ Annual % Change

9. NASDAQ Index Source: NASDAQ

10. Where is the Housing Correction?

11. U.S. New Single-Family Construction Source: Census 33% Tumble

12. U.S. Existing-Home Sales Source: Census 11% Retreat In thousand units

13. Investor (Speculative) Home Sales Source: NAR 29% Fall In thousand units

14. Vacation Home Sales Source: NAR In thousand units

15. Investor-Heavy Markets Now Taking a Hit (Existing-Home Sales: 2006 Q4 vs 2005 Q4) Source: NAR

16. Rapid Change in Prices (1-year Home Price Growth) Source: NAR

17. Construction Jobs Now Falling Source: NAR

18. Income of REALTORS ® Source: NAR

19. Housing’s Contribution to Economy Source: BEA % point contribution to GDP

20. Sub-Par Economic Growth Source: BEA

22. Fight the Bubble

23. Something is Out of Whack! Income and Price set to Index of 100 in 1990 Source: NAR

24. Mortgage Obligation to Income Manageable Source: NAR %

25. Mortgage Obligation to Income Very High in Some Markets San Diego 45% !!! Source: NAR

26. Mortgage Obligation to Income Historically High in Some Markets Miami Way Above Historical Local Norm Source: NAR

27. Mortgage Obligation to Income Manageable in Boston Region Boston Source: NAR

28. Mortgage Obligation to Income Favorable in Louisville Source: NAR 11% Louisville

29. Renters Beginning to Get Squeezed – U.S. Source: Torto-Wheaton Research %

30. Markets Like Phoenix -- Strong in Jobs but Weak in Housing – Feel the Squeeze Source: Torto-Wheaton Research %

31. Subprime Impact

32. Mortgage Delinquencies Source: MBA Job Losses Housing Boom Housing Slump

33. Mortgage Loan Foreclosures: All Action in the Subprime Markets Source: MBA

34. High Delinquencies Source: MBA Katrina Effect Job Troubles

35. High Foreclosures Source: MBA

36. Rising Foreclosures Source: MBA States with Marked Price Deceleration/Declines

37. Falling Foreclosures Source: MBA Mostly Strong Job Growth and Price Appreciating States

38. FHA Market Share …Revival Ahead? Source: HMDA ??? Estimate

39. Jobs Will Buffer the Subprime Fallout

40. Steady U.S. Job Gains 2 Million in Past 12 months Source: BLS Payroll job changes in thousands

41. Wage Growth Picking Up % Source: BLS

42. Job Gains in Boston Region Source: BLS 12-month net payroll job changes in thousands Still down by 100,000 from peak

43. Job Gains in New Orleans Source: BLS 12-month net payroll job changes in thousands Still down by 100,000 jobs compared to pre-Katrina

44. Job Gains in Seattle Region Source: BLS 12-month net payroll job changes in thousands

45. Jobs in Dallas- Ft. Worth Region Source: BLS 12-month net payroll job changes in thousands

46. Job Gains Tampa-St. Petersburg Region Source: BLS 12-month net payroll job changes in thousands

47. Job Gains Phoenix Region Source: BLS 12-month net payroll job changes in thousands

48. Job Gains Washington D.C. Region Source: BLS 12-month net payroll job changes in thousands

49. Jobs: Detroit Region Source: BLS 12-month net payroll job changes in thousands

50. Rates: Near 45-Year Lows Source: Freddie Mac 1970s 9% average 1980s 13% average 1990s 8% average 2000s 6.5% average

51. Stable Mortgage Rates Source: Freddie Mac

52. Mortgage Rates Retreat But Where are the Buyers? Source: Freddie Mac

53. Dow Jones Industrial Average Source: NYSE

54. Record Household Wealth $ trillion Source: Federal Reserve

55. Expanding World Economy Source: World Bank %

56. U.S. vs Foreign Currencies Source: Federal Reserve

58. Existing Housing Inventory Source: NAR

59. New-Home Inventory Source: Census

60. Mortgage Purchase Applications Source: MBA Index

61. Price Correction – Ending? Source: NAR Percent change from a year ago

62. Improving Housing Affordability Source: NAR

64. Latest Daily Home Sales Tracker: Becoming Less Negative Source: NAR

65. Latest Daily Home Price Tracker: Also Less Negative Source: NAR

66. Latest Daily Inventory Tracker: Modest Tightening in Months Supply Source: NAR

67. Economic Outlook The Fed cuts rate in early 2008 4.8% 2.5% 4.6% 2.1% 2007 5.0% 4.8% 10-year Treasury 2.5% 3.2% CPI Inflation 4.8% 4.6% Unemployment Rate 3.0% 3.3% GDP 2008 2006

68. National Housing Outlook -1.0% 5.5% 6.4% 1.46 million 0.86 million 6.29 million 2007 1.4% 1.0% Existing-Home Price Growth 5.1% 5.5% 1-Year ARM 6.7% 6.4% 30-Year FRM 1.52 million 1.80 million Housing Starts 0.94 million 1.05 million New Home Sales 6.49 million 6.48 million Existing-Home Sales 2008 2006

69. Local Forecasts: Who Will be on Top?

72. Best Evidence: Household Wealth Accumulation Source: Federal Reserve Median Net Worth $184,400 $4,000

73. Economic Issues and Residential Real Estate Business Trends Forum NAR Midyear Meetings Washington, D.C. May 17, 2007 Lawrence Yun, Ph.D. Senior Economist NATIONAL ASSOCIATION OF REALTORS® All Real Estate is Local : Local Trends and Local Forecasts