U.S. National Housing Market Update - January 2020

JANUARY 2020
U.S. Real Estate Housing Market Update

“Markets sounded the recession alarm this
year, and the average forecaster now sees a
33% chance of recession over the next year.
In contrast, our new recession model
suggests just a 20% probability. Despite the
record age of the expansion, the usual late-
cycle problems—inflationary overheating
and financial imbalances—do not
look threatening. ”
Goldman Sachs’ 2020 US Outlook

“Housing remains a solid foundation
for the U.S. economy going into 2020.”
- George Ratiu, Senior Economist at Realtor.com

6,040 6,039 6,029 6,000
6,083
6,264
6,143
6,200
NAR MBA Fannie Mae Freddie Mac
2019 2020
Home Sales Are Projected to Grow in 2020

“We expect mortgage rates
to remain low over the next
two years, averaging 3.8%
in 2020 and 2021.” – Freddie Mac

3.7% 3.8% 3.6% 3.7% 3.8%
2019** Freddie Mac Fannie Mae MBA NAR
*Projected rate for 4th quarter of 2020
**Latest Freddie Mac rate
30 Year Mortgage Rate* Projected to
Remain Stable throughout 2020

The Biggest Issue the Housing Market
Will Face in 2020:
Inventory Shortage

“In 2020, we
expect inventory
to struggle to
grow and could
instead reach a
historic low level.”
- realtor.com

4 months 3.9 months
3.7 months
Last Year Last Month Today
Months Supply of Unsold Inventory Is
DECREASING
NAR

“We now expect single-family housing
starts and sales of new homes to increase substantially, aided by
a large uptick in new construction as builders work to replenish
inventories drawn down by the recent surge
in new home sales activity.”
Doug Duncan
Chief Economist at Fannie Mae

“Despite improvements to new
construction and short waves of
sellers, next year will once again
fail to bring a solution to the
inventory shortage.”
George Ratiu
realtor.com Senior Economist

“As millennials embrace homeownership
and take advantage of this year's
unexpectedly low mortgage rates, demand
is outstripping supply, causing inventory to
vanish. …The issue is further compounded
by the fact that sellers tend to be more
reluctant to list during the colder time
of year when the market typically
makes a seasonal slowdown.”
George Ratiu

George Ratiu
“As shoppers modify their strategies for
navigating a housing market that has
become more competitive due to rising
prices & low inventory, the search for a
home is beginning earlier & earlier. With
housing inventory across the U.S. expected
to reach record lows in 2020, we expect
to see this trend continue into the
new year.”

move.com
People have begun their home search earlier
each year since 2015
January 2019 fell just one percent behind
February for highest number of views per listing
In 20% of the large markets, January saw the
highest number of listing views in 2019

ShowingTime’s latest report shows
another INCREASE in buyer traffic…
“The nation’s 12.6% growth in
home showings compared to
2018 was the most significant
jump in buyer traffic during the
current four-month streak of
year-over-year increases. The
West Region saw the greatest
growth in activity, with a 23.1%
jump – the region’s greatest in
the history of the Showing Index.”
23.1%
15.4%
13%
7.1%
West South Northeast Midwest
ShowingTime
Every region saw
an annual increase

“We expect home prices to rise
at least another 5% over
the next 12 months.”
Frank Martell
President and CEO
of CoreLogic

3.5%
5.4%
4.1%
3.9%
3.6%
2.8%
3.1%
2019* CoreLogic Fannie Mae Z' Report NAR Freddie Mac MBA
* Latest CoreLogic Home Price Index
Home Values Are Projected
to Continue to Appreciate
through 2020

2.8
2.3
2.6
2.9
3.4
2020 2021 2022 2023 2024
Projected Mean Percentage Appreciation will drop
initially and then grow for the next few years
Home Price Expectation Survey 2019 4Q

$250,000
$266,500
$272,500
$279,500
$287,750
$297,500
January 2020 January 2021 January 2022 January 2023 January 2024 January 2025
$47,500
Increased home equity based on price appreciation projected by the Home Price Expectation Survey
potential growth in family wealth over the next
five years based solely on increased home equity
Home Price Expectation Survey 2019 4Q

In the last 12 Months, 44 States had an increase in Home Equity.
Only one had a decrease.
CoreLogic

Mark Fleming
First American Chief Economist
“As homeowners gain equity
in their homes, they are more
likely to consider using the
equity to purchase a larger or
more attractive home.”

$210,000
$278,900
$295,000
$320,000
$348,700
$325,000
18 to 34 Years 35 to 44 Years 45 to 54 Years
Price of Home Sold Price of Home Purchased
NAR
Price of Home Purchased Is Greater
than Home Recently Sold

ResourcesSlide Slide Title Link
3 Goldman Sachs’ Quote https://www.goldmansachs.com/insights/pages/outlook-2020-f/US/report.pdf
4 George Ratiu Quote (Housing) https://news.move.com/2019-12-04-Home-Sellers-Will-Remain-on-the-Sidelines-in-2020
5
Home Sales Are Projected to Grow in
2020
www.fanniemae.com, www.freddiemac.com, www.nar.realtor, and www.mba.org
6 Freddie Mac Quote
https://www.cnbc.com/amp/2019/12/18/fannie-mae-boosts-2020-housing-forecast-
significantly.html
7 30 Year Mortgage Rate Projections www.fanniemae.com, www.freddiemac.com, www.nar.realtor, and www.mba.org
9 Realtor.com Quote
https://www.realtor.com/news/trends/biggest-changes-coming-in-2020-real-estate-and-
tips-for-buyers-and-sellers.amp/
10 Months Supply Decreasing https://www.nar.realtor/newsroom/existing-home-sales-descend-1-7-in-November
11 Doug Duncan Quote
https://www.cnbc.com/amp/2019/12/18/fannie-mae-boosts-2020-housing-forecast-
significantly.html
12 George Ratiu Quote (Inventory)
https://www.forbes.com/sites/alyyale/2019/12/05/2020-will-see-historic-low-level-of-
housing-inventory/#3465bda53d7f
13 George Ratiu Quote (Millennials)
https://news.move.com/2019-12-09-Curious-Case-A-U-S-Housing-Market-No-One-Saw-
Coming
14 George Ratiu Quote (Home Search) https://news.move.com/2019-12-18-Could-January-be-the-New-April-for-Home-Shopping
15 January’s Home Search https://news.move.com/2019-12-18-Could-January-be-the-New-April-for-Home-Shopping

Slide Slide Title Link
16 Buyer Traffic https://www.showingtime.com/blog/november-2019-showing-index-results/
17 Frank Martell Quote https://www.showingtime.com/blog/november-2019-showing-index-results/
18 Home Values Are Projected
www.corelogic.com
www.fanniemae.com
zelmanandassociates.com (paid subscription)
www.nar.realtor
www.freddiemac.com
www.mba.org
19, 20
Projected Mean Percentage
Appreciation and Potential Growth
in Family Wealth
https://pulsenomics.com/surveys/#home-price-expectations
21 Increase in Home Equity https://www.corelogic.com/insights-download/homeowner-equity-report.aspx
23 Mark Fleming Quote https://blog.firstam.com/economics/will-housing-market-potential-in-2020-exceed-2019
24
Difference Price of Home Purchased
Vs Home Sold
https://www.nar.realtor/research-and-statistics/research-reports/highlights-from-the-
profile-of-home-buyers-and-sellers
29 Create Videos https://www.keepingcurrentmatters.com/article/how-to-overcome-your-fear-of-video/
Resources

Make Your
Business Your
Top Priority
in 2020

Own Your
Business Plan
• Have a plan and stick
to it. Consistency is key.
• Time block your daily
schedule.
• Commit to regular
lead generation
and follow-up.
• Engage in your
community.

Video, Video,
Video!
• Don’t be camera shy.
You’ve got this.
• More is more.
Stick with it.
• Post consistently
to social media.

Become a
Market Expert
• Read and share your
personalized posts.
• Pair with your local
data, offering the full
picture your clients
need to know.
• Watch the Monthly
Market Reports.
• Print, email, and share
the Seasonal Buyer &
Seller Guides.

2020 is poised to be
a great year for the
real estate market.

Resources
36, 56,
68
Confidence Index
https://www.nar.realtor/research-and-statistics/research-reports/realtors-confidence-
index
37-39,47,
49,50
Existing Home Sales https://www.nar.realtor/topics/existing-home-sales
40-43 New Home Sales
http://www.census.gov/construction/nrs/pdf/newressales.pdf
http://www.census.gov/newhomesales
44 Total Home Sales
https://www.nar.realtor/topics/existing-home-sales
45,46 Pending Home Sales
https://www.nar.realtor/research-and-statistics/housing-statistics/pending-home-
sales
51-53 Case Shiller
http://us.spindices.com/indices/real-estate/sp-case-shiller-20-city-composite-home-
price-index
54
CoreLogic Forecasted YOY %
Change in Price
https://www.corelogic.com/downloadable-docs/marketpulse/the-marketpulse-vol-8-
issue-11-november-2019-screen-112519.pdf
57-63 Inventory
https://www.nar.realtor/topics/existing-home-sales

65 -67 Foot Traffic http://nar.realtor/infographics/foot-traffic
70, 71,
73, 74
Mortgage Rates
http://www.freddiemac.com/pmms/pmms_archives.html
http://www.freddiemac.com/research/forecast/20191220_optimism_heading_into_2
020.page?
72 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
76, 77 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
78-82
Days To Close, FICO Scores,
DTI
http://www.elliemae.com/resources/origination-insight-reports
https://static.elliemae.com/pdf/origination-insight-
reports/EM_OIR_NOVEMBER2019.pdf
Resources

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

3.5%
-1.7%
2.5%
4.2%
6.6%
U.S. Midwest South West
Y-O-Y by regionEXISTING Home Sales
NAR
Northeast

Existing Home Sales
in thousands
Census & NAR
January February March April May June July August September October November December
2017 2018 2019

Census & NAR
2017 2018 2019
New Home Sales in thousands

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

1% 4%
16%
13%
8% 8%
3%
Under $150K $150-$199K $200-299K $300-$399K $400-$499K $500-$749K Over $750K
New Home Sales
% of sales by price range
Census

3.4
3.2
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
3.2
3.1
New Homes Selling Fast
(median months from completion to sold)
Census

Census & NAR
361
373
500
521
597
626
575 586
467
489
450
415
334
368
468
520
598 594 595 589
506 517
456
2018 2019
Total Home Sales in thousands

100 = Historically Healthy Level
PENDING Home Sales
since 2014
NAR

Pending Home Sales
Year-Over-Year By Region
NAR
Northeast
South
7.4%
2.6%
5.0%
7.7%
14.0%
U.S Northeast Midwest South West

Jan
2012
Jan
2013
Jan
2014
Jan
2015
Jan
2016
Jan
2017
Jan
2018
Jan
2019
Percentage of
Distressed Property
Sales
35%
January 2012 - Today 2
%
4%
NAR

5.4%
3.4%
5.9%
5.0%
7.1%
U.S. Northeast Midwest South West
Y-O-Y by region
EXISTING Home Prices
NAR

-15.9%
-3.5%
7.5% 8.0%
2.9%
1.4%
$0-100K $100-250K $250-500K $500-750K $750K-1M $1M+
% -15.9% -3.5% 7.5% 8.0% 2.9% 1.4%
% 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

Jan2014
Feb
Mar
Apr
May
Jun
Jul
Aug
Sept
Oct
Nov
Dec
Jan2015
Feb
Mar
Apr
May
Jun
Jul
Aug
Sept
Oct
Nov
Dec
Jan2016
Feb
Mar
Apr
May
Jun
Jul
Aug
Sept
Oct
Nov
Dec
Jan2017
Feb
Mar
Apr
May
Jun
Jul
Aug
Sept
Oct
Nov
Dec
Jan2018
Feb
Mar
Apr
May
Jun
Jul
Aug
Sept
Oct
Nov
Dec
Jan2019
Feb
Mar
Apr
May
Jun
Jul
Aug
Sept
Oct
S&P Case Shiller
Year-Over-Year PRICE CHANGES
20 City Composite
Case Shiller

4.6%
4.2%
3.5%
3.0%
2.6% 2.5% 2.4%
2.2%
2.0% 2.0% 2.1% 2.2%
Nov Dec Jan 2019 Feb Mar Apr May Jun Jul Aug Sept Oct
Year-Over-Year PRICE CHANGES
20CityComposite
Case Shiller
S&P Case Shiller

Forecasted Year-Over-Year % Change in
Price
CoreLogic

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

Oct Nov Dec Jan-18 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan-19 Feb Mar Apr May June July Aug Sept Oct Nov
Months Inventory of
HOMES FOR SALE
last 2 years
NAR

3.7
3.9
3.5
3.8
4.2
4.3 4.3
4.1
3.9
4.0
3.9
3.7
Dec Jan Feb Mar Apr May June July Ago Sep Oct Nov
Months Inventory of HOMES FOR
SALE Last 12 Months
NAR

% 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
Year-over-Year
Inventory Levels
NAR

HOUSING SUPPLY
Year-Over-Year
6.2%
4.6%
2.9%
2.4%
1.7%
2.7%
0.0%
-1.6%
-2.6% -2.7%
-4.3%
-5.2%
Dec Jan Feb Mar Apr May June Jul Aug Sep Oct Nov
Last 12 Months
JunDec Jan Feb Mar Apr May
NAR

5.6
5.4
5.3
5.7
5.6
6.0
6.2
6.3
6.4
7.2
6.5
7.4
6.5
6.1
5.8
6.1
6.7
5.4
6
5.5
5.3
5.5
5.4
Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec
2018 2019
New Home Inventory
months supply
Census

7.4
6.5
6.1
5.8
6.1
6.7
5.4
6.0
5.5
5.3
5.5 5.4
Dec Jan-19 Feb Mar Apr May Jun Jul Aug Sep Oct Nov
New Home Inventory
Last 12 Months
Census
months supply

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

Dec Jan Feb Mar Apr May June July Aug Sep Oct Nov
Foot Traffic
indicator of future sales
Last 12 Months
NAR

2018
2019
Foot Trafficindicator of future sales
NAR

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
Freddie Mac
Mortgage Rates
Freddie Mac 30-Year Fixed Rate
3.95%
3.72%

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
1/5/20…
2/2
3/2
3/30
4/27
5/25
6/22
7/20
8/17
9/14
10/12
11/9
12/7
1/4/20…
2/1
3/1
4/5
5/4
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
30-Year Fixed
Rate Mortgages
from Freddie Mac
3.97
Freddie Mac
3.72%

Mortgage Rate Projections
Quarter
Freddie
Mac
Fannie
Mae
MBA NAR
Average
of All Four
2020 1Q 3.8 3.7 3.7 3.8 3.75%
2020 2Q 3.8 3.6 3.7 3.8 3.72%
2020 3Q 3.8 3.6 3.7 3.8 3.72%
2020 4Q 3.8 3.6 3.7 3.8 3.72%

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
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 3.8 3.8 3.8 3.8
Freddie Mac
Mortgage Rates
Freddie Mac
30-Year Fixed Rate
- Actual
- Projected
2016
2017 2018
2019
2020

3.8 3.8 3.8 3.8
2020 Q1 2020 Q2 2020 Q3 2020 Q4
Freddie Mac
January 2018 – Today
Actual Interest Rates
Mortgage Rates
Freddie Mac
30-Year Fixed Rate
2020
Q2 Q3 Q4
Where Are They Going?
Q1

Mortgage Credit Availability
YES NO MAYBE

Apr
2013
Jan
2014
Jan
2015
Jan
2016
Jan
2017
Jan
2018
Jan
2019 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 2006 June 2008 June 2010 June 2012 June 2014 June 2016 June 2018 November 2019
Historic Data for the
MORTGAGE CREDIT
AVAILABILITY INDEX
(a report from the Mortgage Bankers Association)
MBA

47
49
47
45
43
44
45
43
45
46
47 47
Dec Jan Feb Mar Apr May June July Aug Sep Oct Nov
Average Days
To Close A Loan
All Closed Loans as per Ellie Mae
Last 12 Months

726
724
726 726
728 728
731 731
734
737 737 736
Dec Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov
FICO® Score Requirements
Last 12 months

0.04% 0.65%
8.45%
17.85%
23.63%
35.34%
14.03%
500-549 550-599 600-649 650-699 700-749 750-799 800+
FICO® Score
Distribution
50.62% All Closed Loans as per Ellie Mae

Average FICO® Score
for Closed Purchase Loans
by Loan Type
736 755
679
712
All Loans Conventional FHA VA

37 36
43 41
All Loans* Conventional FHA VA
Average Back End DTI
for Closed Purchase Loans by Loan Type

U.S. National Housing Market Update - January 2020

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