This document summarizes an economic and housing market presentation given by Lawrence Yun, Chief Economist of the National Association of Realtors, and Mike McGrew, 2014 NAR Treasurer. It includes graphs and charts showing trends in home sales, prices, inventory levels, mortgage rates, unemployment, and other economic indicators. The presentation forecasts modest economic growth in coming years, with home prices expected to rise 6-11% annually through 2014, supporting a continued multiyear housing market recovery.

1. Economic and Housing Market
Trends and Outlook
Lawrence Yun, Ph.D., Chief Economist, NATIONAL ASSOCIATION OF
REALTORS®
Mike McGrew, 2014 NATIONAL ASSOCIATION OF REALTORS®
Treasurer
Presentation at NAR Leadership Summit
Chicago, IL
August 27, 2013

2. Existing Home Sales
3,000,000
3,500,000
4,000,000
4,500,000
5,000,000
5,500,000
6,000,000
6,500,000
7,000,000
7,500,000
2000
- Jan
2001
- Jan
2002
- Jan
2003
- Jan
2004
- Jan
2005
- Jan
2006
- Jan
2007
- Jan
2008
- Jan
2009
- Jan
2010
- Jan
2011
- Jan
2012
- Jan
2013
- Jan
$8,000

3. Existing Home Inventory
(Bouncing at 13-year lows)
0
500000
1000000
1500000
2000000
2500000
3000000
3500000
4000000
4500000
2000
- Jan
2001
- Jan
2002
- Jan
2003
- Jan
2004
- Jan
2005
- Jan
2006
- Jan
2007
- Jan
2008
- Jan
2009
- Jan
2010
- Jan
2011
- Jan
2012
- Jan
2013
- Jan

4. New Home Sales
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
2000
- Jan
2001
- Jan
2002
- Jan
2003
- Jan
2004
- Jan
2005
- Jan
2006
- Jan
2007
- Jan
2008
- Jan
2009
- Jan
2010
- Jan
2011
- Jan
2012
- Jan
2013
- Jan
Up 30%

5. New Home Inventory
(Newly Constructed Homes Inventory at 50-year low)
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
2000
- Jan
2001
- Jan
2002
- Jan
2003
- Jan
2004
- Jan
2005
- Jan
2006
- Jan
2007
- Jan
2008
- Jan
2009
- Jan
2010
- Jan
2011
- Jan
2012
- Jan
2013
- Jan

6. Shadow Inventory
(% of Loans in foreclosure process or more than 90 days late)
0
2
4
6
8
10
12
U.S.

7. State Differences in Shadow Inventory
0
2
4
6
8
10
2000-Q1
2000-Q4
2001-Q3
2002-Q2
2003-Q1
2003-Q4
2004-Q3
2005-Q2
2006-Q1
2006-Q4
2007-Q3
2008-Q2
2009-Q1
2009-Q4
2010-Q3
2011-Q2
2012-Q1
2012-Q4
Maryland
Virginia

8. Housing Starts … Need to Reach 1.5 million
soon or persistent housing shortage
0
500
1000
1500
2000
2500
2000
- Jan
2001
- Jan
2002
- Jan
2003
- Jan
2004
- Jan
2005
- Jan
2006
- Jan
2007
- Jan
2008
- Jan
2009
- Jan
2010
- Jan
2011
- Jan
2012
- Jan
2013
- Jan
multifamily single-family
Thousand units (annualized)
Long-term Average

9. Existing vs. New Home Price … Big Gap
(single-family homes)
0
50000
100000
150000
200000
250000
300000
2000-Jan
2000-Jul
2001-Jan
2001-Jul
2002-Jan
2002-Jul
2003-Jan
2003-Jul
2004-Jan
2004-Jul
2005-Jan
2005-Jul
2006-Jan
2006-Jul
2007-Jan
2007-Jul
2008-Jan
2008-Jul
2009-Jan
2009-Jul
2010-Jan
2010-Jul
2011-Jan
2011-Jul
2012-Jan
2012-Jul
2013-Jan
2013-Jul
New
Existing

10. Home Price Forecast
by Wall Street Journal Economists Panel
Year WSJ Home Price Forecast
2013 7%
2014 5%

11. Lies
Damn Lies
and …

12. 30-Year Fixed Mortgage Rate
(been below 6% for 5 years)
3
4
5
6
7
8
9
2000-Jan
2000-Aug
2001-Mar
2001-Oct
2002-May
2002-Dec
2003-Jul
2004-Feb
2004-Sep
2005-Apr
2005-Nov
2006-Jun
2007-Jan
2007-Aug
2008-Mar
2008-Oct
2009-May
2009-Dec
2010-Jul
2011-Feb
2011-Sep
2012-Apr
2012-Nov
2013-Jun
%

13. Sustainable Recovery?

14. Buyer and Seller Traffic
from REALTOR® Survey
0
20
40
60
80
2008-Jan
2008-Apr
2008-Jul
2008-Oct
2009-Jan
2009-Apr
2009-Jul
2009-Oct
2010-Jan
2010-Apr
2010-Jul
2010-Oct
2011-Jan
2011-Apr
2011-Jul
2011-Oct
2012-Jan
2012-Apr
2012-Jul
2012-Oct
2013-Jan
2013-Apr
2013-Jul
Buyer Seller

15. All-Cash Buyers
(% as total)
0%
5%
10%
15%
20%
25%
30%
35%
40%
2008-Oct
2009-Jan
2009-Apr
2009-Jul
2009-Oct
2010-Jan
2010-Apr
2010-Jul
2010-Oct
2011-Jan
2011-Apr
2011-Jul
2011-Oct
2012-Jan
2012-Apr
2012-Jul
2012-Oct
2013-Jan
2013-Apr
2013-Jul
Normal Range

16. First-time Homebuyers
(% as total)
0%
10%
20%
30%
40%
50%
60%
2008-Oct
2009-Jan
2009-Apr
2009-Jul
2009-Oct
2010-Jan
2010-Apr
2010-Jul
2010-Oct
2011-Jan
2011-Apr
2011-Jul
2011-Oct
2012-Jan
2012-Apr
2012-Jul
2012-Oct
2013-Jan
2013-Apr
2013-Jul
1st-time Buyers
Normal Range

17. Renter Households
25,000
27,000
29,000
31,000
33,000
35,000
37,000
39,000
41,000
1980-Q1
1981-Q1
1982-Q1
1983-Q1
1984-Q1
1985-Q1
1986-Q1
1987-Q1
1988-Q1
1989-Q1
1990-Q1
1991-Q1
1992-Q1
1993-Q1
1994-Q1
1995-Q1
1996-Q1
1997-Q1
1998-Q1
1999-Q1
2000-Q1
2001-Q1
2002-Q1
2003-Q1
2004-Q1
2005-Q1
2006-Q1
2007-Q1
2008-Q1
2009-Q1
2010-Q1
2011-Q1
2012-Q1
2013-Q1
In thousands

18. Homeowner Households has not Grown since
2006 … but Primed to Grow
50,000
55,000
60,000
65,000
70,000
75,000
80,000
1980-Q1
1981-Q1
1982-Q1
1983-Q1
1984-Q1
1985-Q1
1986-Q1
1987-Q1
1988-Q1
1989-Q1
1990-Q1
1991-Q1
1992-Q1
1993-Q1
1994-Q1
1995-Q1
1996-Q1
1997-Q1
1998-Q1
1999-Q1
2000-Q1
2001-Q1
2002-Q1
2003-Q1
2004-Q1
2005-Q1
2006-Q1
2007-Q1
2008-Q1
2009-Q1
2010-Q1
2011-Q1
2012-Q1
2013-Q1
In thousands

19. Wealth Distribution
(Federal Reserve data on median net worth)
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
Renter Owner
1998
2001
2004
2007
2010
2014
2014 Forecast by NAR
Bubble Crash
• Dodd-Frank?
• PATH?
• Lawsuits?
• Legacy?

20. U.S. Total Payroll Jobs
124000
126000
128000
130000
132000
134000
136000
138000
140000
2000-Jan
2000-Jul
2001-Jan
2001-Jul
2002-Jan
2002-Jul
2003-Jan
2003-Jul
2004-Jan
2004-Jul
2005-Jan
2005-Jul
2006-Jan
2006-Jul
2007-Jan
2007-Jul
2008-Jan
2008-Jul
2009-Jan
2009-Jul
2010-Jan
2010-Jul
2011-Jan
2011-Jul
2012-Jan
2012-Jul
2013-Jan
2013-May
In thousands

21. Financial Industry High Profits …
Ready to Dial Down Credit Stringency?
-200
-100
0
100
200
300
400
500
2001-Q1
2001-Q3
2002-Q1
2002-Q3
2003-Q1
2003-Q3
2004-Q1
2004-Q3
2005-Q1
2005-Q3
2006-Q1
2006-Q3
2007-Q1
2007-Q3
2008-Q1
2008-Q3
2009-Q1
2009-Q3
2010-Q1
2010-Q3
2011-Q1
2011-Q3
2012-Q1
2012-Q3
2013-Q1
$ billion

22. Forecast
2011 2012 2013
Forecast
2014
Forecast
GDP Growth +1.8% +2.1% +1.6% +2.6%
Existing Home Sales 4.3 million 4.7 million 5.1 million 5.2 million
Housing Starts 610 K 780 K 1.0 million
(not enough)
1.2 million
(not enough)
Existing Home Price
Growth
- 4% + 6% + 11% + 6%
30-yr Mortgage Rate
(year-end)
4.7% 3.5% 4.6% 5.2%

23. Summary on What to Expect
• Likely Multiyear Housing Recovery
– No recession
– Job growth and household formation
– Lagging housing starts and continuing housing
shortage
• Home prices are primed to rise further, by
16% cumulatively in 2013 and 2014

24. What’s the Matter with
Canada?
• Digging Earth
• Arms

25. What’s the Matter with
Kansas?
Who said “There is no place like home”
Who was raised in KS and was imbued with
strong moral compass?

26. #1 Jayhawks Fan!

27. Primary Drivers of Membership
• Existing Home Sales and Real Home Price
Growth
– Lagged effect
• Job Market Conditions
– More members if high unemployment

28. REALTOR® Median Gross Income
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
1995 1998 2000 2002 2004 2006 2007 2008 2009 2010 2011 2012 2013
est
How many with more than $100,000? … 200,000
How many with less than $10,000? … 360,000

29. Unemployment Rate
0
2
4
6
8
10
12 2000-Jan
2000-Aug
2001-Mar
2001-Oct
2002-May
2002-Dec
2003-Jul
2004-Feb
2004-Sep
2005-Apr
2005-Nov
2006-Jun
2007-Jan
2007-Aug
2008-Mar
2008-Oct
2009-May
2009-Dec
2010-Jul
2011-Feb
2011-Sep
2012-Apr
2012-Nov
2013-Jun

30. Part-time Workers not by Choice …
Those who may try out real estate
0
2000
4000
6000
8000
10000
2000-Jan
2000-Aug
2001-Mar
2001-Oct
2002-May
2002-Dec
2003-Jul
2004-Feb
2004-Sep
2005-Apr
2005-Nov
2006-Jun
2007-Jan
2007-Aug
2008-Mar
2008-Oct
2009-May
2009-Dec
2010-Jul
2011-Feb
2011-Sep
2012-Apr
2012-Nov
2013-Jun
Part-time for Economic Reasons

31. 0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
1,000,000
1,100,000
1,200,000
1,300,000
1,400,000
1,500,000
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
Annual Membership
(NRDS count at year-end)