RealPulseAZ - February 2021 - Market Review

FEBRUARY 2021
RealPulseAZ
“The Beat Of The AZ Housing Market Direct To You”
Nathan Holman – MaricopaCountyLiving.com

“Existing-home sales
totaled 5.64 million in
2020, up 5.6% from 2019
and the most since before
the Great Recession.”
NAR

Forecast 2020 2021
Fannie Mae 6.47M 6.71M
NAR 6.45M 7.50M
MBA 6.46M 7.18M
Transaction Forecasts

2021 Home Price Forecaster Projection
National Association of Realtors 6%
Zelman & Associates 6%
realtor.com 5.7%
Freddie Mac 5.3%
Mortgage Bankers Association 5.1%
Fannie Mae 4.2%
CoreLogic 2.9%
Average of all seven 5%

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
2020
Q1
2020
Q2
2020
Q3
2020
Q4
2021
Q1
2021
Q2
2021
Q3
2021
Q4
2022
Q1
2022
Q2
2022
Q3
2022
Q4
Rate 3.7 3.6 3.5 3.8 4.2 4 3.9 3.9 4.3 4.5 4.6 4.8 4.4 4 3.7 3.7 3.5 3.2 3 2.8 2.9 2.9 3 3 3.1 3.1 3.2 3.2
Freddie Mac
Mortgage Rates
Freddie Mac
30-Year Fixed Rate
- Actual
- Projected
2016
2017
2018
2019
2020
2021
2022

“Rising interest rates reduce house-buying
power and affordability, but are often a
sign of a strong economy, which increases
home buyer demand. By any historic
standard, today’s mortgage rates remain
historically low and will continue to boost
house-buying power and keep purchase
demand robust.”
Mark Fleming
Chief Economist at First American

Mortgage Rate Projections
Quarter
Freddie
Mac
Fannie
Mae
MBA NAR
Average
of All Four
2021 2Q 2.9 2.7 3.1 3.0 2.92%
2021 3Q 3.0 2.8 3.3 3.0 3.02%
2021 4Q 3.0 2.8 3.4 3.1 3.07%
2022 1Q 3.1 2.9 3.5 3.2 3.17%

WHERE WILL
LISTINGS COME
FROM IN 2021?

“Some people will feel comfortable listing
their home during the first half of 2021.
Others will want to wait until the vaccines
are widely distributed. This suggests more
inventory will be for sale in late 2021 and
into the spring selling season in 2022.”
Ali Wolf
Chief Economist at Zonda

Months Supply of Available Inventory
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
Sept Oct Nov Dec January
2020
Feb Mar Apr May June Jul Aug Sept Oct Dec
NAR
Existing Homes
3.6
1.9

“Total housing inventory at the end of December
totaled 1.07 million units, down 16.4% from
November and down 23% from one year ago
(1.39 million). Unsold inventory sits at an all-time
low 1.9-month supply at the current sales pace,
down from 2.3 months in November and down
from the 3.0-month figure recorded in December
2019. NAR first began tracking the single-family
home supply in 1982.
NAR

2020 NAR’s Real Estate Forecast Summit
Consensus View of Work-from-Home
6%
21%
18%
12%
2019 Actual 2020 Actual (Latest) 2021 F 2022 F
2020 Panel Consensus Forecast
Percent of workers working from home

“New home sales activity, both
mortgage applications and home
sales, ran at a pace considerably
ahead of 2019, showing the ongoing
strong growth in housing demand and
new residential construction.”
Joel Kan
MBA’s AVP of Economic and Industry Forecasting

TOP THREE REASONS
homeowners didn’t
put their house on
the market in 2020
YouGov Survey
34%
life is too uncertain
right now
31%
financial uncertainty
25%
COVID-19
health concerns

28.6%
7.5%
15.6%
25.5%
7.5%
13.4%
Made their monthly
payments during their
forbearance period
Loan deferral
Past due
payments were
brought current
Loan paid
off
No loss
mitigation
plan
1.9% Repayment plans,
short sales, deed-in-lieus
MBA
Upon exit from forbearance plan:
51.7% are paid in full
33% work out
repayment plan
15.3% are still
in trouble
Cumulative forbearance exits for
the period from June 1, 2020
through January 24, 2021

“But given the huge price gains recently,
I don't think many homes will have to go
to foreclosure… I think homes will just be
sold, and there will be cash left over for
the seller, even in a distressed situation.
So that's a bit of a silver lining in that we
don't expect a massive sale of distressed
properties.”
Lawrence Yun
Chief Economist at NAR

AFFORDABILITY
IN TODAY’S
REAL ESTATE
MARKET

108
110
122
131
128
125 126 127
133
131
122
128
126
131
124
113
108
115
138
169
172
186
197
176
164
166 167
158
148
162
168.2
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 2017 2018 2019 Today
Housing Affordability
Index 1990 to Today
Years when
distressed
properties
dominated the
market
NAR

18.2
14.9
June 2018 January 2019 June January 2020 Today
Historic Norm
21.2%
Percentage of Income Needed for a Mortgage Payment
Decreasing Dramatically as Mortgage Rates Fall
NAR

CoreLogic
$1,100
$1,309
$575
$962
$878
$826
January 2000 June 2006 January 2012 June 2018 June 2019 Today
National Homebuyers’ “TYPICAL MORTGAGE PAYMENT”
Inflation-Adjusted Monthly Mortgage Payment That Buyers Commit To
*The typical mortgage payment used for this chart represents the inflation-
adjusted monthly payment based on U.S. median sales price and assumes a
20% down payment, a fixed-rate 30-year mortgage, and Freddie Mac’s
average monthly rate. It does not include taxes or insurance.

“Once you include the equity
benefit of price appreciation,
owning made more financial sense
than renting in 48 out of the 50 top
markets, with the only exceptions
being San Francisco & San Jose, CA.”
Odeta Kushi
Deputy Chief Economist at First American

“People do not
follow the best
leaders. They follow
the ones they can
understand the
easiest.”
- Donald Miller

Resources
Slide Slide Title Link
2 NAR Quote
https://www.nar.realtor/newsroom/existing-home-sales-rise-0-7-in-december-annual-sales-see-
highest-level-since-2006
3 Transaction Forecasts
https://www.fanniemae.com/media/37951/display
https://cdn.nar.realtor/sites/default/files/documents/forecast-Q1-2021-us-economic-outlook-01-
30-2021.pdf
https://www.mba.org/news-research-and-resources/research-and-economics/forecasts-and-
commentary
4 2021 Price Projections
https://cdn.nar.realtor/sites/default/files/documents/forecast-Q1-2021-us-economic-outlook-01-
30-2021.pdf
https://www.zelmanassociates.com/ (subscription required)
https://www.realtor.com/research/2021-national-housing-forecast/
http://www.freddiemac.com/research/forecast/20210114_quarterly_economic_forecast.page?
commentary
5 Mortgage Rates http://www.freddiemac.com/research/forecast/20210114_quarterly_economic_forecast.page
6 Fleming Quote
https://blog.firstam.com/economics/why-the-housing-market-can-thrive-if-a-new-rising-rate-era-
begins

7 Mortgage Rate Projections
http://www.freddiemac.com/research/forecast/20210114_quarterly_economic_forecast.page
commentary
https://cdn.nar.realtor/sites/default/files/documents/forecast-Q1-2021-us-economic-outlook-
01-30-2021.pdf
9 Wolf Quote https://www.realtor.com/news/trends/vaccines-housing-market/
10 Months Supply of Inventory
https://cdn.nar.realtor/sites/default/files/documents/ehs-08-2020-supplemental-data-2020-09-
22.pdf
11 NAR Quote
https://www.nar.realtor/newsroom/existing-home-sales-rise-0-7-in-december-annual-sales-see-
highest-level-since-2006
12 Consensus View of Work-from-Home https://www.nar.realtor/events/nar-real-estate-forecast-summit
13 Kan Quote
https://www.mba.org/2020-press-releases/december/november-new-home-purchase-
mortgage-applications-increased-347-percent
14 YouGov Survey
http://zillow.mediaroom.com/2020-10-27-COVID-19-is-Driving-the-Housing-Inventory-Crisis-in-
Unexpected-Ways
15 Upon Exit from Forbearance
https://www.mba.org/2021-press-releases/february/share-of-mortgage-loans-in-forbearance-
remains-unchanged-at-538-percent
Resources

16 Yun Quote
https://www.investors.com/news/housing-market-outlook-2021-watch-these-stocks-trends-
cities/
18 Housing Affordability Index
https://www.nar.realtor/blogs/economists-outlook/housing-affordability-declines-in-
november-2020-as-incomes-crawl-and-home-prices-jump
19 Percentage of Income
https://www.nar.realtor/blogs/economists-outlook/housing-affordability-declines-in-
november-2020-as-incomes-crawl-and-home-prices-jump
20 Typical Mortgage Payment
https://www.corelogic.com/blog/2020/12/affordability-challenges-ahead-large-
demographic-tailwind-has-arrived-amid-lowest-inventory-of-homes-for-sale.aspx
21 Kushi Quote
https://blog.firstam.com/economics/dont-overlook-the-benefit-of-equity-when-considering-
whether-to-rent-or-own
23 Miller Quote
https://www.realtor.com/news/trends/biggest-changes-coming-in-2020-real-estate-and-tips-
for-buyers-and-sellers.amp/
Resources

Resources
31, 51, 63 Confidence Index
https://www.nar.realtor/research-and-statistics/research-reports/realtors-confidence-
index
32-34, 42, 51-
56
Existing Home Sales https://www.nar.realtor/topics/existing-home-sales
35-38 New Home Sales
http://www.census.gov/construction/nrs/pdf/newressales.pdf
http://www.census.gov/newhomesales
39 Total Home Sales
https://www.nar.realtor/topics/existing-home-sales
40, 41 Pending Home Sales
https://www.nar.realtor/research-and-statistics/housing-statistics/pending-home-
sales
46-48 Case Shiller
https://www.spglobal.com/spdji/en/indices/indicators/sp-corelogic-case-shiller-20-
city-composite-home-price-nsa-index/#news-research
49
CoreLogic Forecasted YOY %
Change in Price
https://www.corelogic.com/insights-download/home-price-index.aspx
52-58 Inventory
https://www.nar.realtor/topics/existing-home-sales

Coming Soon:
Spring 2021 Buyer & Seller Guides

60-62 Foot Traffic http://nar.realtor/infographics/foot-traffic
65, 66,
68, 69
Mortgage Rates
http://www.freddiemac.com/pmms
http://www.freddiemac.com/pmms/pmms_archives.html
67 Mortgage Rate Projections
http://www.freddiemac.com/research/forecast/
http://www.fanniemae.com/portal/research-insights/forecast.html
https://www.mba.org/news-research-and-resources/research-and-
economics/forecasts-and-commentary
https://www.nar.realtor/research-and-statistics
71, 72 Mortgage Credit Availability
https://www.mba.org/news-research-and-resources/newsroom
https://www.mba.org/news-research-and-resources/research-and-economics/single-
family-research/mortgage-credit-availability-index
73-77
Days To Close, FICO Scores,
DTI
http://www.elliemae.com/resources/origination-insight-reports
Resources

Average Days on the Market
NAR

Jan 2014 Jan 2015 Jan 2016 Jan 2017 Jan 2018 Jan 2019 Jan 2020
Since January 2014
EXISTING
Home Sales
NAR

22.2%
27.4%
26.2%
20.7%
17.9%
U.S. Northeast Midwest South West
EXISTING Home Sales
NAR
Y-O-Y by region

January February March April May June July August September October November December
2018 2019 2020
Existing Home Sales
in thousands
Census & NAR

Census & NAR
2018 2019 2020
New Home Sales in thousands

jun-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan 2020
Census
New Home Sales
annualized in thousands

2% 3%
16%
18%
11%
6%
2%
Under $150K $150-$199K $200-299K $300-$399K $400-$499K $500-$749K Over $750K
New Home Sales
% of sales by price range
Census

3.3
3.7
3.9
3.8
3.7
3.3
3.1
2.9 2.9
2.7
3.0
3.2 3.2
3.6 3.6
3.4
3.5
3.6
3.4
3.2
3.5
3.1
3.2
3.0
3.4 3.4 3.4
3.3
3.6
4.2
4.3
4.5 4.5
4.1
4.0
3.1
Jan-18 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan-19 Feb Mar Apr May Jun Jul Aug sep Oct Nov Dec 20-Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
New Homes Selling Fast
(median months from completion to sold)
Census

Census & NAR
334
368
468
520
598 594 595 589
506 517
454
483
376
398
475
426 436
586
682
641 640 650
552
592
2019 2020
Total Home Sales in thousands

100 = Historically Healthy Level
PENDING Home Sales
since 2014
NAR

21.4% 22.1%
13.9%
26.6%
18.9%
U.S Northeast Midwest South West
Pending Home Sales Year-Over-Year By Region
NAR

Jan
2012
Jan
2013
Jan
2014
Jan
2015
Jan
2016
Jan
2017
Jan
2018
Jan
2019
Jan
2020
Percentage of
Distressed Property
Sales
35%
January 2012 - Today
1
%
4%
NAR
Distressed sales – foreclosures and short sales –
represented less than 1% of sales in December

Help 4 Down Payment
Ask For Details

12.9%
19.0%
13.7%
11.3%
14.2%
U.S. Northeast Midwest South West
Y-O-Y by region
EXISTING Home Prices
NAR

-15.3%
5.7%
36.0%
64.6%
76.3%
93.6%
$0-100K $100-250K $250-500K $500-750K $750K-1M $1M+
% -15.3% 5.7% 36.0% 64.6% 76.3% 93.6%
% Change in
Sales
from last year by Price Range
NAR

Year-Over-
Year
PRIC
E
CHANGE
S
Case
Shiller
S&P Case Shiller
Jun 2012 Jan 2013 Jan 2014 Jan 2015 Jan 2016 Jan 2017 Jan 2018 Jan 2019 Jan 2020

Jan
2014
Feb
Mar
Apr
May
Jun
Jul
Aug
Sept
Oct
Nov
Dec
Jan
2015
Feb
Mar
Apr
May
Jun
Jul
Aug
Sept
Oct
Nov
Dec
Jan
2016
Feb
Mar
Apr
May
Jun
Jul
Aug
Sept
Oct
Nov
Dec
Jan
2017
Feb
Mar
Apr
May
Jun
Jul
Aug
Sept
Oct
Nov
Dec
Jan
2018
Feb
Mar
Apr
May
Jun
Jul
Aug
Sept
Oct
Nov
Dec
Jan
2019
Feb
Mar
Apr
May
Jun
Jul
Aug
Sept
Oct
Nov
Dec
Jan
2020
Feb
Mar
Apr
May
Jun
Jul
Ago
Sept
Oct
Nov
S&P Case Shiller
Year-Over-Year PRICE CHANGES
20 City Composite
Case Shiller

2.8%
3.1%
3.5%
3.9% 4.0%
3.6% 3.5%
4.1%
5.3%
6.6%
8.0%
9.1%
Dec Jan 2020 Feb Mar Apr May Jun Jul Aug Sept Oct Nov
Year-Over-Year PRICE CHANGES
20CityComposite
Case Shiller
S&P Case Shiller

CoreLogic
9.2%
2.9%
Current Forecast
Year-Over-Year % Change in Price

Januar
y 2011
Januar
y 2012
Januar
y 2013
Januar
y 2014
Januar
y 2015
Januar
y 2016
Januar
y 2017
Januar
y 2018
Januar
y 2019
Januar
y 2020
Months Inventory
of
HOMES FOR
SALE
2011 - Today
NAR

4.2
4.3 4.3 4.3
4.4
4.3
4.0
3.6
3.8
3.6
3.8
4.2
4.3 4.3
4.2
4.0 4.0
3.9
3.7
3.0
3.1
3.0
3.4
4.0
4.8
3.9
3.1
3.0
2.7
2.5
2.3
1.9
May-18 Jun Jul Aug Sep Oct Nov Dec Jan-19 Feb Mar Apr May June July Aug Sept Oct Nov Dec Jan-20 Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec
Months Inventory of
HOMES FOR SALE
last 2 years
NAR

3.1
3.0
3.4
4.0
4.8
3.9
3.1
3.0
2.7
2.5
2.3
1.9
Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec
Months Inventory of HOMES FOR
SALE Last 12 Months
NAR

January
2014
January
2015
January
2016
January
2017
January
2018
January
2019
January
2020
% 7. 5. 3. 6. 6. 5. 5. 4. 6. 5. 5. -0 -0 -0 2. -0 1. 0. -4 -1 -3 -4 -1 -3 -2 -1 -1 -3 -9 -5 -5 -1 -6 -1 -9 -6 -7 -6 -6 -9 -8 -7 -9 -6 -6 -1 -9 -1 -9 -8 -7 -6 -6 0. 0. 2. 1. 2. 4. 6. 4. 2. 2. 1. 2. 0. -1 -2 -2 -4 -5 -9 -1 -9 -1 -1 -1 -1 -2 -1 -1 -1 -2 -2
Year-over-Year
Inventory Levels
NAR

HOUSING SUPPLY
Year-Over-Year
-11.3%
-9.8% -10.20%
-19.70%
-18.8%
-18.2%
-21.1%
-18.6%
-19.2%
-19.8%
-22.0%
-23.0%
Jan 2020 Feb Mar Apr May June Jul Aug Sept Oct Nov Dec
Last 12 Months
NAR

5.0
5.5
6.5
6.8
5.3
4.3
3.6 3.5 3.6 3.6
4.2 4.3
20-Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec
New Home Inventory
Last 12 Months
Census
months supply

6.5
6.1
5.8
6.1
6.7
5.0
5.9
5.7
5.3
5.5
5.6
5.3
5.0
5.5
6.5
6.8
5.3
4.3
3.6
3.5
3.6 3.6
4.2
4.3
Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec
2019 2020
New Home Inventory
months supply
Census

Jul 2013 Jan 2014 Jan 2015 Jan 2016 Jan 2017 Jan 2018 Jan 2019 Jan-20
Foot Traffic
indicator of future sales
NAR

41.8
60.9
13.5
1.8
6.8
32.9
46.5
40.7
47.3
39.8
29.4
44.2
Foot Traffic
Indicator of future sales
Last 12 Months
NAR

2019
2020
Foot Traffic
indicator of future sales
NAR

Freddie Mac
Mortgage Rates
Freddie Mac 30-Year Fixed Rate
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
1/31
3/7
4/4
5/2
6/6
7/3
8/1
9/5
10/3
11/7
12/5
1/2
2/6
3/5
4/2
5/7
6/4
7/2
8/6
9/3
10/1
11/5
12/3
1/7
2/4
3.95%
2.73%

30-Year Fixed
Rate Mortgages
from Freddie Mac
Freddie Mac
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
1/5/2017
2/2
3/2
3/30
4/27
5/25
6/22
7/20
8/17
9/14
10/12
11/9
12/7
1/4/2018
2/1
3/1
4/5
5/4
6/7
7/5
8/2
9/6
10/4
11/1
12/6
1/3/2019
1/31
3/7
4/4
5/2
6/6
7/3
8/1
9/5
10/3
11/7
12/5
1/2/2020
2/6
3/5
4/2
5/7
6/4
7/2
8/6
9/3
10/1
11/5
12/3
1/7
2/4
3.97%
2.73%

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
2020
Q1
2020
Q2
2020
Q3
2020
Q4
2021
Q1
2021
Q2
2021
Q3
2021
Q4
2022
Q1
2022
Q2
2022
Q3
2022
Q4
Rate 3.7 3.6 3.5 3.8 4.2 4.0 3.9 3.9 4.3 4.5 4.6 4.8 4.4 4 3.7 3.7 3.5 3.2 3.0 2.8 2.9 2.9 3.0 3.0 3.1 3.1 3.2 3.2
Freddie Mac
Mortgage Rates
Freddie Mac
30-Year Fixed Rate
- Actual
- Projected
2016
2017
2018
2019
2020
2022
2021

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
1/31
3/7
4/4
5/2
6/6
7/3
8/1
9/5
10/3
11/7
12/5
1/2
2/6
3/5
4/2
5/7
6/4
7/2
8/6
9/3
10/1
11/5
12/3
1/7
2/4
2.9
3.0 3.0
3.1
2021 Q2 2021 Q3 2021 Q4 2022 Q1
Freddie Mac
January 2018 – Today
Actual Interest Rates
Mortgage Rates
Freddie Mac
30-Year Fixed Rate
Where Are They Going?

Mortgage Credit Availability
YES NO MAYBE

Apr
2013
Jan
2014
Jan
2015
Jan
2016
Jan
2017
Jan
2018
Jan
2019
Jan
2020
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 2005 June 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 June 2019 June 2020 December
Historic Data for the
MORTGAGE CREDIT
AVAILABILITY INDEX
(a report from the Mortgage Bankers Association)
MBA

48
43
40
42
45
47 47
49
51
54 55
58
Average Days To Close A Loan
All Closed Loans as per Ellie Mae
Last 12 Months

738 738
742
749 750 751 750
752 753 753 752 751
Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec
FICO® Score Requirements
Last 12 months

0.01% 0.24%
6.01%
17.65%
23.20%
37.53%
15.36%
500-549 550-599 600-649 650-699 700-749 750-799 800+
FICO® Score
Distribution
47.11%

Average FICO® Score
for Closed Purchase Loans
by Loan Type
751 757
682
724
All Loans Conventional FHA VA

35 35
44
41
All Loans* Conventional FHA VA
Average Back End DTI
for Closed Purchase Loans by Loan Type

Nathan Holman
Tel Direct: 623-500-6553
Cell: 623-326-3162
email:
Nathan@HolmanGroupAZ.com
Web:
MaricopaCountyLiving.com
We Have Active Buyers In
Almost Every Metro City
Throughout Greater Phoenix
Area.
Contact Me For A Listing
Consultation with The
Buyers Identified For:
YOUR HOME!

RealPulseAZ - February 2021 - Market Review

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