January 2017

Patricia Laya
Bloomberg News
“Consumer confidence jumped
to the highest level since 2004,
extending a surge in Americans’
optimism for their finances and the
U.S. economy following Donald Trump’s
election victory.
The University of Michigan said that its
final index of sentiment rose to 98.2 from
93.8.”

“The National Federation of
Independent Businesses' Small
Business Optimism Index jumped
to 98.4 from 94.9 - its sharpest surge
since 2009 - with all of the increase in
sentiment coming after the U.S. elections.
‘The November index was basically unchanged
from October's reading up to the point of the
election and then rose dramatically after the results
of the election were known,’ explained Chief
Economist Bill Dunkelberg.”
Luke Kawa
Bloomberg News

“The CNBC All-America Economic
Survey for the fourth quarter found
that the percentage of Americans who
believe the economy will get better in the
next year jumped an unprecedented 17
points to 42%, compared with before the election.
‘We're looking at America moving into a more
positive era with regard to economic expectations,’
said Micah Roberts, vice president at Public Opinion
Strategies.”
Steve Liesman
CNBC

“Consumer confidence climbed in
December to the highest level since
August 2001 as Americans were more
upbeat about the outlook than at any
time in the last 13 years, according to the
New York-based Conference Board.
American households are expecting a Donald
Trump administration to deliver. They are more
upbeat about the prospects for the economy,
labor market and their incomes.”
Michelle Jamrisko
Bloomberg News

The Consumer Confidence Index
The Conference Board Consumer Confidence
2001 2009 2017
BUSH elected
OBAMA elected
TRUMP elected

-0.4%
-2.4%
-1.0%
-1.3%
5.7%PENDING
Home Sales
Year-Over-Year By Region
U.S. Midwest West South Northeast
NAR 1/2017

HOUSING SUPPLY
Year-Over-Year
-3.8%
-2.2%
-1.1%
-1.5%
-3.6%
-9.6%
-5.8% -5.8%
-10.1%
-6.8%
-4.3%
-9.3%
Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
Last 12 Months
NAR 1/2017

333K 325K
630K
293K 283K
594K
Starter Homes Trade-Up Homes Premium Homes
2015 4Q 2016 4Q
Housing Inventory by Category
Trulia

% Change in Inventory by Category
Trulia
-9.1%
-12.1% -12.9%
-5.6%
Total Homes Starter Homes Trade-Up Homes Premium Homes
2016 4th Quarter compared to 2015 4th Quarter

3.97
4.20
3.39
3.49
3.59
3.69
3.79
3.89
3.99
4.09
4.19
4.29
30 Year Fixed
Rate Mortgages
from Freddie Mac
Freddie Mac 1/2016

Quarter
Fannie
Mae
Freddie
Mac
MBA NAR
Average
of All Four
2017 2Q 4.1 4.2 4.4 4.3 4.25
2017 3Q 4.1 4.2 4.6 4.4 4.33
2017 4Q 4.2 4.2 4.7 4.6 4.43
2018 1Q 4.2 ? 4.7 ? ?
Mortgage Rate Projections
1/2017

“We think that conforming 30-year fixed rates probably make it
into the 4.625 percent to 4.75 percent range at some point
during 2017 as a peak” - HSH
“I wouldn’t be surprised if the 30-year fixed mortgage rate hits
4.75 percent.” - Svenja Gudell, Zillow’s Chief Economist
“[I see] mortgage rates getting much closer to 5 percent at the
end of next year.” - Mark Fleming, the Chief Economist at First American
“Our forecast is saying we expect
mortgage rates to hit 4.5 percent.”
- Jonathan Smoke, Chief Economist at realtor.com
“By this time next year, expect the 30-
year fixed rate to likely be in the
4.5 percent to 5 percent range.”
- Lawrence Yun, NAR Chief Economist

“Despite the recent jump in
mortgage rates since the
election, the annual average
for the 30-year fixed-rate
mortgage was 3.65 percent in
2016, the lowest annual average
ever recorded by Freddie Mac
going back to 1971.”
Freddie Mac

“Mortgage rates would
have to be a lot higher
before they really crimp a
buyers’ ability to afford a home -
Trulia chief economist Ralph
McLaughlin estimates between 7%
and 10% for many metros.”
MarketWatch.com

“Though mortgage rates
moved higher again this
week, borrowers should
still appreciate how low they
are - because they're likely to
increase further.”
Realtor Magazine

300
350
400
450
500
550
600
650
700
750
800
850
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Median Asking
RENT
since 1988
Census

“Renters paid a
cumulative $478.5
billion in 2016, a 3.8
percent increase
from 2015.”
Zillow

“Some would-be sellers may be
reluctant to move up or trade
down - especially if they've
refinanced in recent years.”
- Lawrence Yun

MarketWatch.com
“But higher mortgage rates have
secondary effects, as well. Consider
homeowners who bought their homes
in the past few years, or who’ve enjoyed
a refinance as rates hovered closer to 3%.
Unless a move is absolutely necessary, those owners
are likely to balk at having to sell their home and then
borrow at higher rates for a new one.
‘Interest rate lock matters,’ says Mark Zandi, chief
economist for Moody’s Analytics.”

MarketWatch.com
“Zandi cautioned that he doesn’t
think ‘rate lock’ kicks in until
rates are well over 5%, however.
He calculates that a one percentage
point increase in rates will increase the
tenure of a typical American homeowners
by just over six months - also not helpful in
a market starved for activity.”

Bob Walters
Quicken Loans Chief Economist
“Home values pushed
higher throughout 2016,
largely driven by lack of
supply in the hottest markets. It’s
yet to be seen if these increases will
continue or wane as homebuilding
grows, boosting inventory.”

Actual Year-Over-Year % Change in Price
by State
CoreLogic

Month-Over-Month % Change in Price
by State
CoreLogic

“For most adults near traditional
retirement age, a home is their most
valuable asset — dwarfing retirement
accounts, other financial assets, and
other nonfinancial assets. Although relatively
few retirees tap into their home equity, having it
provides financial security.
In fact, many retirement security experts argue that
the conventional three-legged stool of retirement
resources - Social Security, pensions, and savings
- is incomplete because it ignores the home.”
Fannie Mae
reporting on recent Urban Institute study

Anand Nallathambi
President and CEO of CoreLogic
“Price appreciation is the main
Ingredient for home equity wealth
creation, and home prices rose 5.8%
according to the CoreLogic Price Index.
Pay down of principal is the second key
component of equity building. Many
homeowners have refinanced into shorter-term
loans and by doing so, they have significantly
fewer mortgage payments and are able to build
equity wealth faster.”

CoreLogic
By State
% of Homes with Positive Equity

% of Homes with Significant Equity (> 20%)
By State
CoreLogic

Fannie Mae & CoreLogic
37%
79.1%
% who believe they have > than 20% equity % who actually have > 20% equity
Significant
Equity (>20%)
Perceived/Actual

“The HPPI compares the perceived
gap between the homeowner and the
appraiser’s opinion of a home’s value
And has provided an intriguing look into
the psychographics of our housing market.
The most recent HPPI indicates homeowners
and appraisers are closer to agreeing at the end
of 2016 than they were at the start of the new year.
It’s our hope that with this information the only
surprises this holiday season are the ones wrapped
under the tree.”
Bob Walters
Quicken Loans Chief Economist

Quicken Loans
-1.8 -1.75
-1.99
-2.17
-1.95 -1.89 -1.93
-1.69
-1.56
-1.26
-1.15
-1.00
Jan-16 Feb Mar April May Jun Jul Aug Sep Oct Nov Dec
% -1.8 -1.75 -1.99 -2.17 -1.95 -1.89 -1.93 -1.69 -1.56 -1.26 -1.15 -1.00
Appraiser Home Value Opinions
Compared to Homeowner Estimates
Last 12 Months

Average Days on the Market
By State
NAR

4000000
4500000
5000000
5500000
Jan 2012 Jan 2013 Jan 2014 Jan 2015 Jan 2016
EXISTING
Home Sales
Since January 2012
NAR 1/2017

4,300,000
4,400,000
4,500,000
4,600,000
4,700,000
4,800,000
4,900,000
5,000,000
5,100,000
5,200,000
5,300,000
5,400,000
5,500,000
5,600,000
5,700,000
Jan 2014 Jan 2015 Jan 2016
EXISTING
Home Sales
Since January 2014
NAR 1/2017

15.4% 15.7%
11.6%
18.8% 19.0%
U.S. Northeast South Midwest West
Y-O-Y by region
EXISTING
Home Sales
NAR 1/2017

January February March April May June July August September October November December
2015 2016
Existing Home Sales
in thousands
Freddie Mac

2015 2016
New Home Sales
in thousands
Freddie Mac

New Home Sales
Annualized
in thousands
Census

3%
11%
35%
25%
11%
12%
4%
Under $150K $150-$199K $200-$299K $300-$399K $400-$499K $500-$749K Over $750K
% of sales by price range
New Home
Sales
Census

3.0
3.2
3.3
3.8
4.0
3.9
4.0
3.5 3.5
3.2
2.9
3.0
2.9
3.3
3.7
4.0
4.1
3.8
4.0
3.6
3.2
3.1 3.1
3.2
New Homes Selling Fast
(median months from completion to sold)
Census

320
340
451
497
542
616
594
547
507
483
387
341
359
471
525
578
632
568
586
530
490
456
January February March April May June July August September October November
2015 2016
Total Home Sales
in thousands
Freddie Mac

Pending Home Sales
2014
2015
2016
NAR 1/2017

90
95
100
105
110
115
100 = Historically Healthy Level
PENDING
Home Sales
since 2012
NAR 1/2017

90
92
94
96
98
100
102
104
106
108
110
112
114
January 2014 January 2015 January 2016
100 = Historically Healthy Level
PENDING
Home Sales
since 2014
NAR 1/2017

Percentage of
Distressed Property
Sales
35%
January 2012 - Today
6%
9%
NAR 1/2017

6.8%
3.3%
8.5%
6.5%
9.2%
U.S. Northeast West Midwest South
Y-O-Y by region
EXISTING
Home Prices
NAR 1/2017

-2.4%
20.7%
35.4%
31.9%
43.2%
33.9%
$0-100K $100-250K $250-500K $500-750K $750K-1M $1M+
% -2.4% 20.7% 35.4% 31.9% 43.2% 33.9%
% Change in Sales
from last year by Price Range
NAR 1/2017

0
0.02
0.04
0.06
0.08
0.1
0.12
0.14
June 2012 January 2013 January 2014 January 2015 January 2016
Year-Over-Year
PRICE
CHANGES
Case Shiller
S&P Case Shiller 1/2017

13.2%
12.9%
12.4%
10.8%
9.3%
8.1%
6.7%
5.6%
4.8%
4.5%
4.3% 4.4%
4.6%
5.0% 5.0% 4.9% 4.9% 5.0% 5.0%
4.7%
5.4% 5.5%
5.7% 5.7% 5.7%
5.4% 5.5% 5.4% 5.3%
5.1% 5.0% 5.1%
5.4%
5.6%
Jan
2014
Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
2015
2016
Feb Mar Apr May Jun Jul Aug Sep Oct
Year-Over-Year PRICE CHANGES
20 City Composite
Case Shiller

Jan
2014
2015
2016
Feb Mar Apr May Jun Jul Aug Sep Oct
Year-Over-Year PRICE CHANGES
20 City Composite
Case Shiller

Forecasted Year-Over-Year % Change in Price
by State
CoreLogic

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

3.5
4
4.5
5
5.5
6
Sep Oct Nov Dec Jan-15 Feb Mar Apr May Jun July Aug Sep Oct Nov Dec Jan-16 Feb Mar Apr May Jun Jul Aug Sep Oct Nov
Months Inventory of
HOMES FOR SALE
last 2 years
NAR 1/2017

3.9
4.0
4.4 4.4
4.7 4.7
4.5
4.7
4.6
4.4
4.3
4.0
Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
Months Inventory of
HOMES FOR SALE
Last 12 Months
NAR 1/2017

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
% -24% -20. -16. -14%-13% -7.6 -5% -6.2 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% -0.5 -0.5 -0.5 2.0% -0.9 1.8%0.4% -4.7 -1.7 -3.1 -4.5 -1.9 -3.8 -2.2 -1.1 -1.5 -3.6 -9.6 -5.8 -5.8 -10. -6.8 -10. -9.3
Year-over-Year
Inventory Levels
NAR 1/2017

4.8
4.5
5.0 5.0 5.0
5.5
5.2 5.2
5.8
5.6
5.4
5.5 5.5 5.5
5.1 5.1
5.2
4.6
5.2
5.0
5.2
5.1
Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov
2015 2016 Census
New Home Inventory
months supply

5.2
5.5 5.5 5.5
5.1 5.1
5.2
4.6
5.2
5.0
5.2
5.1
Dec Jan-16 Feb Mar Apr May Jun Jul Aug Sept Oct Nov
New Home Inventory
months supply
Census
Last 12 Months

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

Dec Jan 2016 Feb Mar Apr May June July Aug Sept Oct Nov
NAR 1/2017
Last 12 Months

2015 2016
NAR 1/2017

Mortgage Credit Availability
YES NO MAYBE

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

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

49
50
46
44 44
45
46 46 46
48 48
49
Dec Jan Feb Mar Apr May June July Aug Sept Oct Nov
Average Days To Close A Loan
All Closed Loans as per Ellie Mae
Last 12 Months

722
719
720
722
723
724
726
727
731 731
730
728
Dec Jan-16 Feb Mar Apr May June July Aug Sept Oct Nov
FICO Score
Requirements
Last 12 months

0.02% 0.41%
8.6%
21.3%
24.6%
32.2%
13.0%
500-549 550-599 600-649 650-699 700-749 750-799 800+
FICO Score
Distribution
54.9%

728
753
686
709
All Loans Conventional FHA VA
Average FICO Score
for Closed Purchase Loans
by Loan Type

38
35
42
40
All Loans Conventional FHA VA
Average Back End DTI
for Closed Purchase Loans by Loan Type

Resources
KEEPINGCURRENTMATTERS.COM
Slide Slide Title Link
4 Patricia Laya Quote https://www.bloomberg.com/news/articles/2016-12-23/consumer-sentiment-in-u-s-rises-to-11-year-high-after-trump-win
5 Luke Kawa Quote https://www.bloomberg.com/news/articles/2016-12-23/consumer-sentiment-in-u-s-rises-to-11-year-high-after-trump-win
6 Steve Liesman Quote http://www.cnbc.com/2016/12/09/optimism-on-economy-stocks-surges-since-trump-election-cnbc-survey.html
7 Michelle Jamrisko Quote https://www.bloomberg.com/news/articles/2016-12-27/u-s-consumer-confidence-index-increased-to-113-7-in-december
8 The Consumer Confidence Index http://money.cnn.com/2016/12/28/news/economy/consumer-confidence-trump/index.html
11-12 Housing Inventory by Category https://www.trulia.com/blog/trends/inventory-q42016/
15 Mortgage Rate Projection Quotes
http://www.hsh.com/finance/mortgage/yearly-mortgage-outlook.html
http://www.inman.com/2016/12/09/will-happen-mortgage-rates-2017-7-expert-opinions
16 Freddie Mac Quote http://freddiemac.mwnewsroom.com/press-releases/fixed-mortgage-rates-move-higher-otcqb-fmcc-1291436
17, 22-23 MarketWatch.com Quotes http://www.marketwatch.com/story/housings-big-question-what-will-happen-when-buyers-think-4-rates-are-crazy-2016-12-22?mod=mw_share_twitter
18 Realtor Magazine Quote http://realtormag.realtor.org/daily-news/2016/12/30/putting-mortgage-rates-perspective#.WGbTIPwydSE.twitter
19, 92 Median Asking Rent http://www.census.gov/housing/hvs/data/histtabs.html
20 Zillow Quote http://zillow.mediaroom.com/2016-12-30-U-S-Housing-Worth-Record-High-29-6-Trillion-in-2016
21 Lawrence Yun Quote https://www.nar.realtor/news-releases/2016/12/home-sales-expected-to-expand-modestly-in-2017-as-affordability-pressures-temper-buyer-enthusiasm
27 Fannie Mae Quote http://www.thehomestory.com/home-equity-could-be-an-important-source-of-financial-security-in-retirement/
28-30 Equity Quote & Maps http://www.corelogic.com/research/negative-equity/corelogic-q3-2016-equity-report.pdf
31, 106 Significant Equity Chart
http://fanniemae.com/portal/about-us/media/commentary/080315-deggendorf-wilcox.html?sf11644984=1
http://www.corelogic.com/about-us/researchtrends/homeowner-equity-report.aspx#.VnuAKpMrJE4
36,60, 69
Average Days on Market,
Buyer & Seller Traffic Maps
http://nar.realtor/reports/realtors-confidence-index

Resources
KEEPINGCURRENTMATTERS.COM
Slide Slide Title Link
10, 37-39,
50, 52-53,
61-65
Existing Home Sales Report http://nar.realtor/
40-41, 45 Freddie Mac Home Sales
http://www.census.gov/construction/nrs/pdf/newressales.pdf
http://nar.realtor/
42-44, 66-67 New Home Sales, Inventory http://www.census.gov/construction/nrs/pdf/newressales.pdf
9, 46-49, Pending Home Sales Report http://nar.realtor/
54-56 Case Shiller Price Index https://www.spice-indices.com/idpfiles/spice-assets/resources/public/documents/461749_cshomeprice-release-1227.pdf?force_download=true
26-26, 57 CoreLogic Price Changes http://www.corelogic.com/about-us/researchtrends/corelogic-home-price-insights.aspx#
24, 32-33, 58 Appraisal Challenge http://www.quickenloans.com/press-room/2016/12/13/appraiser-opinions-trail-owner-estimates-one-percent/
70-72 Foot Traffic http://nar.realtor/
13, 74 Freddie Mac Rates http://www.freddiemac.com/pmms
14, 75 Mortgage Rate Projections
http://www.fanniemae.com/resources/file/research/emma/pdf/Housing_Forecast_122016.pdf
http://www.freddiemac.com/finance/pdf/201612-Outlook-12%2021%2016.pdf
https://www.mba.org/Documents/Research/MFF_DEC16.pdf
https://www.nar.realtor/sites/default/files/reports/2016/embargoes/forecast-12-2016-us-economic-outlook-12-14-2016.pdf
77-78 Mortgage Credit Availability https://www.mba.org/news-research-and-resources/research-and-economics/single-family-research/mortgage-credit-availability-index
79-83, 104 Ellie Mae Report http://www.elliemae.com/origination-insight-reports/Ellie_Mae_OIR_NOVEMBER2016.pdf
87 SmartAsset.com Quote https://smartasset.com/mortgage/real-estate-trends-2017
91 5 Reasons to Own https://www.trulia.com/blog/buying-your-first-home-for-financial-security/
95, 101 FSBO Slides
http://economistsoutlook.blogs.realtor.org/2016/11/17/homes-sell-for-more-with-a-realtor-than-if-you-sell-solo-research-says/
http://nar.realtor/reports/highlights-from-the-profile-of-home-buyers-and-sellers

“Whether you’re preparing to
purchase a new home or sell an
old house in the new year, it’s
important to know how housing
trends could affect you. Keeping your
finger on the pulse of the market can help
you avoid being left out in the cold by rising
interest rates or a widening gap between
supply and demand.”
SmartAsset.com

3 Ways to Use
KCM Materials
When Prospecting

RentersApartment
Lease
RENTERS

Reasons Why Homeownership is
a Good Financial Investment5
5. Overall, homeowners can enjoy greater
wealth growth than renters.
“Owning a home is one of the most common ways households
build long-term wealth, as it acts like a forced savings account.
Instead of paying your landlord, you can pay yourself in the long
run through paying down a mortgage on a house.”
– Ralph McLaughlin – Trulia Chief Economist
1. Mortgage payments can be fixed while rents go up.
2. Equity in your home can be a financial resource later.
3. You can build wealth without paying capital gains.
4. A mortgage can act as a forced savings account.
Trulia

Reasons to Hire a
Real Estate Professional5
They help with all disclosures and paperwork necessary in
today’s heavily regulated environment.
They are well educated in and experienced with the
entire sales process.
They act as a ‘buffer’ in negotiations with all parties
throughout the entire transaction.
They help understand today’s real estate values when
setting the price on a listing or on an offer to purchase.
They simply and effectively explain today’s real estate
headlines and decipher what they mean to you.

By FSBO By AGENT
$168K
$185K
$245K
FSBOs where buyer
knew seller
All FSBOs Homes Sold by an
Agent
Typical Sold Price
FSBO vs. Agent
Source: NAR
Studies have shown that people are more likely
to FSBO in markets with lower price points.

“I’m thinking of selling my
house on my own.”

5
7
9
11
13
15
17
19
1991 1993 1995 1997 1999 2001 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
The percentage of homes selling as a FSBO has
decreased to 8%, the lowest number recorded since 1981.
FSBOs as a Percentage
of all Home Sales

“I’m not sure my credit score is
high enough to buy a home.”

“I don’t know if I’d get enough
money from my house to make
it worth selling.”

January 2017

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