DECEMBER 2018

2019 Forecast

Will Home Prices Continue to Appreciate through 2019?

projections of 105 economists, market analysts, and real estate experts

104

1

Yes No

BY RAW NUMBERS

Yes No

BY PERCENTAGE

99%

“You can call it a bubble…but it's not the same. It's more placid.

I don't expect a sharp turn in the housing market at this point.”

Robert Shiller Nobel Prize Winner co-founder of the Case-Shiller Index

Source 2018 2019 2020 2021 2022

HPES +5.9 +4.2 +2.9 +2.6 +2.9

Zelman & Assoc. +5.5 +4.5 +4.1 N/A N/A

MBA +5.8 +4.3 +2.9 +1.9 N/A

Freddie Mac +5.1 +4.3 +2.9 N/A N/A

NAR +4.7 +2.5 +3 N/A N/A

Fannie Mae +5.4 +4.1 +2.2 N/A N/A

AVERAGE +5.4 +3.9 +3 +2.3 +2.9

Projected Home Price % Appreciation Going Forward

CoreLogic

Forecasted Year-Over-Year % Change in Price

4.95.0

5.25.3

Freddie Mac

2019 Q1

Where Are They Going In 2019?

January – Today Actual Interest Rates

2019 Q2

2019 Q3

2019 Q4Mortgage RatesFreddie Mac30-Year Fixed Rate

CoreLogic

$1,000

$1,259

$550

$730 $803

$922 $1,000

January 2000 June 2006 February 2012 October 2016 October 2017 Today Projected thistime next year

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 rte. It does not include taxes or insurance.

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 2017 2018

Median Asking

Census

RENTsince 1988

$319,200

$6,710

Homeowner Renter

Difference in 65+ Adults

NET WORTH Homeowner vs. RenterJoint Center of Housing Studies at Harvard University

$143,500 is in home equity

Joint Center for Housing Studies at Harvard University

The Largest Number of

Listings Expire on December

31st

Our House Didn’t Sell! Should We:

❑ FSBO❑ Wait Until the Spring❑ List with a New Agent

7 Reasons NOT to Sell Your Home as a FSBO

1. Hard to Price it Correctly2. Having a Marketing Plan can be a Challenge3. Inconvenience of Showing the Home Themselves4. There is a Legal Liability5. Be Careful of Scams!6. Emotional Attachment to the House7. FSBOs Sell for Less!

5

7

9

11

13

15

17

19

21

1981 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

FSBOs as a Percentageof all Home Sales

The percentage of homes selling as a FSBO hasdecreased to 7%, the lowest number recorded since 1981.

7%

0

10

20

30

40

50

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Where Buyers Find the Homes They PurchaseOver the Last 15 Yearsby percentage

Newspapers

Yard Signs

The Internet

87% 90%85% 86% 84% 84%

All purchasers 37 and younger 38 to 52 53 to 62 63 to 71 72 to 92NAR

Percentage of Home Buyers Who Used an Agent or Broker by age group

By FSBO By AGENT

Typical Sold PriceFSBO vs. Agent

Source: NAR

Studies have shown that people are more likely to FSBO in markets with lower price points.

$200,000

$264,900

FSBOs Homes Sold by an Agent

$

1,460,000

1,520,000

1,580,000

1,640,000

1,800,000

1,870,000

1,930,000

December 2017 January 2018 February March April May June

Inventory Levels this time last year

NAR

Why Didn’t Our House Sell?

❑ Condition of the House❑ Price (Over Priced?)❑ Marketing Plan❑ Lack of Communication

with your Agent

66%

18 - 34

73%

35 - 54

87%

55+

76%

All

“Given a choice between spending a fixed amount of money on a down payment for a new home or fixing up their current home, most Americans choose renovation.”

Zillow

Share of Respondents who Choose Renovation by Age

DECEMBER 2018

Winter Buyer & Seller GuidesLaunched Friday, November 30th

“Some websites offer a wide swath of information for consumers, but they lack depth. Today we have the power of data science at our fingertips — this is a game-changer.

When real estate companies use this kind of information, it empowers consumers with insights they can trust.”

Sean BlackForbes Real Estate Council

ResourcesSlide Slide Title Link

4, 6Home Prices Appreciating in 2019, Home Price Projections

pulsenomics.com, zelmanassociates.com, freddiemac.com, fanniemae.com, mba.org, nar.realtor, corelogic.com

5 Robert Shiller Quote https://www.cnbc.com/2018/10/26/robert-shiller-i-dont-expect-a-sharp-turn-in-the-housing-market.html

7 Forecasted YOY Prices http://www.corelogic.com/about-us/researchtrends/corelogic-home-price-insights.aspx

8 Freddie Mac Interest Rates http://www.freddiemac.com/research/forecast/20180924_economic_growth.html

9 Typical Mortgage Paymenthttp://www.corelogic.com/about-us/researchtrends/the-marketpulse-report.aspx#.Wm9nR6aWzIUhttps://themreport.com/daily-dose/11-15-2018/going-up-and-up

10 Median Asking Rent http://www.census.gov/housing/hvs/files/currenthvspress.pdf

11 Net Worth of 65+ http://www.jchs.harvard.edu/housing-americas-older-adults-2018

15-16, 18 FSBO Slideshttps://www.nar.realtor/research-and-statistics/research-reports/highlights-from-the-profile-of-home-buyers-and-sellers

17 Generations Use an Agent http://nar.realtor/reports/home-buyer-and-seller-generational-trends

19 Inventory Levels last year http://www.realtor.org/topics/existing-home-sales

21 Likelihood ofRenovation https://www.zillow.com/research/americans-prefer-renovations-21576

22 Find the Gold in Expired Listings http://www.mykcm.com/eguides

24 Sean Black Quotehttps://www.forbes.com/sites/forbesrealestatecouncil/2018/11/15/are-these-three-cs-the-key-to-the-real-estate-revolution/

KEEPINGCURRENTMATTERS.COM

ResourcesSlide Slide Title Link

28, 49, 59Average Days on Market,Buyer & Seller Traffic Maps

https://www.nar.realtor/reports/realtors-confidence-index

29-30, 39-42, 50-55

Existing Home Sales Report http://nar.realtor/

31-32, 36 Freddie Mac Home Saleshttp://www.census.gov/construction/nrs/pdf/newressales.pdfhttp://nar.realtor/

33-35, 56-57 New Home Sales, Inventory http://www.census.gov/construction/nrs/pdf/newressales.pdf

37-38 Pending Home Sales Report http://nar.realtor/

43-45 Case Shiller Price Index http://us.spindices.com/indices/real-estate/sp-case-shiller-20-city-composite-home-price-index

46 Forecasted Change in Price http://www.corelogic.com/about-us/researchtrends/corelogic-home-price-insights.aspx

47 Appraisal Challenge https://www.quickenloans.com/press-room/2018/10/09/quicken-loans-study-home-value-perceptions-stable-as-summer-ends/

60-62 Foot Traffic http://nar.realtor/

64-65, 67-68 Freddie Mac Rates http://www.freddiemac.com/pmms

66 Mortgage Rate Projections

http://www.freddiemac.com/research/forecast/20181127_economic_growth.htmlhttp://www.fanniemae.com/resources/file/research/emma/pdf/Housing_Forecast_112018.pdfhttps://www.mba.org/Documents/Research/Mtg%20Fin%20Forecast%20Nov%202018.pdfhttps://www.nar.realtor/sites/default/files/documents/forecast-11-2018-us-economic-outlook-11-02-2018.pdf

70-71 Mortgage Credit Availability https://www.mba.org/news-research-and-resources/research-and-economics/single-family-research/mortgage-credit-availability-index

72-76 Ellie Mae Report https://assets.contentstack.io/v3/assets/blt47a327ac368e22cd/bltdcb07859e9e60e83/5bc68d9eedb71a1476d18676/EM_OIR_SEPTEMBER2018.pdf

KEEPINGCURRENTMATTERS.COM

Average Days on the Market

NAR

Jan 2014 Jan 2015 Jan 2016 Jan 2017 Jan 2018

Since January 2014

EXISTINGHome Sales

NAR 12/2018

-2.6%

-4.7%

-0.9%

0.6%

-8.7%

U.S. Northeast Midwest West

Y-O-Y by region

EXISTINGHome Sales

NAR 12/2018

South

Existing Home Sales in thousands

Census & NAR

January February March April May June July August September October November December

2017 2018

Census & NAR

January February March April May June July August September October November December

2017 2018

New Home Sales in thousands

Jun-14 Jan-15 Jan-16 Jan-17 Jan-18

Census

New Home Salesannualized in thousands

6%8%

36%

23%

12%

9%7%

Under $150K $150-$199K $200-299K $300-$399K $400-$499K $500-$749K Over $750KCensus

New Home Sales% of sales by price range

3.23.3

3.2

3.4

3.63.7

3.1

2.92.8

3.13.2 3.2

3.4

3.23.3

3.7

3.93.8

3.7

3.33.2

2.9 2.9

2.7

Nov Dec Jan-17 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan-18 Feb Mar Apr May Jun Jul Aug Sep Oct

Census

New Homes Selling Fast(median months from completion to sold)

Census & NAR

364 366

516503

612

656

561580

512 507

475 472

361 373

500521

597626

575 585

461

January February March April May June July August September October November December

2017 2018

Total Home Sales in thousands

January… January… January… January… January…

100 = Historically Healthy Level

PENDING Home Salessince 2014

NAR 12/2018

-6.7%

-2.9%

-4.9% -4.6%

-15.3%

U.S. Northeast Midwest South West

PENDING Home SalesYear-Over-Year By Region

NAR 12/2018

Jan 2012 Jan 2013 Jan 2014 Jan 2015 Jan 2016 Jan 2017 Jan 2018

Percentage ofDistressed Property

Sales

35%

January 2012 - Today3%

4%

NAR 12/2018

Home Prices

3.8%

3.0%

2.4%

3.8%

1.9%

U.S. Northeast Midwest South West

Y-O-Y by region

EXISTING Home Prices

NAR 12/2018

-10.6%

-1.9%

4.6%

0.5%

7.5%6.5%

$0-100K $100-250K $250-500K $500-750K $750K-1M $1M+

% -10.6% -1.9% 4.6% 0.5% 7.5% 6.5%

% Change in Salesfrom last year by Price Range

NAR 12/2018

June 2012 Jan 2013 Jan 2014 Jan 2015 Jan 2016 Jan 2017 Jan 2018

Year-Over-Year

PRICECHANGES

Case Shiller

S&P Case Shiller 12/2018

Year-Over-Year PRICE CHANGES20 City Composite

S&P Case Shiller 12/2018

Case Shiller

6.3%6.4%

6.3%6.4%

6.3%

6.7% 6.7%

6.5%

6.2%

6.0%

5.7%

5.5%

Oct Nov Dec Jan 2018 Feb Mar Apr May Jun Jul Aug Sep

Year-Over-Year PRICE CHANGES20 City Composite

Case Shiller

S&P Case Shiller 12/2018

CoreLogic

Forecasted Year-Over-Year % Change in Price

-0.67

-0.50

-0.60

-0.53

-0.36-0.33 -0.34

-0.25-0.28 -0.28 -0.29 -0.28

Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov

% -0.67 -0.5 -0.6 -0.53 -0.36 -0.33 -0.34 -0.25 -0.28 -0.28 -0.29 -0.28

Quicken Loans

Appraiser Home Value Opinions Compared to Homeowner Estimates

Last 12 Months

HOUSINGINVENTORY

NAR

Seller Traffic

January 2011

January 2012

January 2013

January 2014

January 2015

January 2016

January 2017

January 2018

Months Inventory ofHOMES FOR SALE

2011 - Today

NAR 12/2018

Nov Dec Jan-17 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan-18 Feb Mar Apr May Jun Jul Aug Sep Oct

Months Inventory of HOMES FOR SALE

last 2 years

NAR 12/2018

3.5

3.2

3.4 3.4

3.6

4.0

4.1

4.3 4.3 4.3

4.4

4.3

Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct

NAR 12/2018

Months Inventory of HOMES FOR SALELast 12 Months

January 2014 January 2015 January 2016 January 2017 January 2018

% 7.3 5.3 3.2 6.5 6.0 5.5 5.8 4.5 6.0 5.2 5.0 -0. -0. -0. 2.0 -0. 1.8 0.4 -4. -1. -3. -4. -1. -3. -2. -1. -1. -3. -9. -5. -5. -10 -6. -10 -9. -6. -7. -6. -6. -9. -8. -7. -9. -6. -6. -10 -9. -11 -9. -8. -7. -6. -6. 0.5 0.0 2.7 1.1 2.8

Year-over-Year Inventory Levels

NAR 12/2018

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul AugSep Oct Nov Dec Jan Feb Mar Apr May Jun Jul AugSep Oct Nov Dec Jan Feb Mar Apr May Jun Jul AugSep 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

% -24 -20 -16 -14 -13 -7. -5% -6. 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. -0. -0. 2.0 -0. 1.8 0.4 -4. -1. -3. -4. -1. -3. -2. -1. -1. -3. -9. -5. -5. -10 -6. -10 -9. -6. -7. -6. -6. -9. -8. -7. -9. -6. -6. -10 -9. -11 -9. -8. -7. -6. -6. 0.5 0.0 2.7 1.1 2.8

Year-over-Year Inventory Levels

NAR 12/2018

HOUSING SUPPLY Year-Over-Year

-9.7%

-11.1%

-9.5%

-8.1%

-7.2%

-6.3% -6.1%

0.5%0.0%

2.7%

1.1%

2.8%

Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct

NAR 12/2018

Last 12 Months

Jun Jul Aug Sep Oct

5.25.1

5.0

5.4 5.45.3

6.0 6.0

5.3

5.6

4.9

5.55.6

5.45.3

5.75.5

6.06.2

6.46.5

7.4

Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec

2017

2018

Census

New Home Inventorymonths supply

4.9

5.5 5.65.4 5.3

5.75.5

6.06.2

6.4 6.5

7.4

Nov Dec Jan-18 Feb Mar Apr May Jun Jul Aug Sep Oct

Census

New Home Inventory months supply

Last 12 Months

BUYERDEMAND

Jul 2013 Jan 2014 Jan 2015 Jan 2016 Jan 2017 Jan 2018

Foot Trafficindicator of future sales

NAR 11/2018

Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep

Foot Trafficindicator of future sales

Last 12 Months

NAR 11/2018

January February March April May June July August September October November December

2017

2018

Foot Trafficindicator of future sales

NAR 11/2018

NAR

Buyer Traffic

INTERESTRATES

1/4 2/1 3/1 4/5 5/3 6/7 7/5 8/2 9/6 10/4 11/1

Freddie Mac 12/2018

Mortgage RatesFreddie Mac 30-Year Fixed Rate

3.95%

4.81%

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/

17 2/2

3/2

3/3

0

4/2

7

5/2

5

6/2

2

7/2

0

8/1

7

9/1

4

10

/12

11/9

12/7

1/4/

18

2/1

3/1

4/5

5/4

6/7

7/5

8/2

9/6

10/4

11/1

30-Year FixedRate Mortgages

from Freddie Mac

4.81

3.97

Freddie Mac 12/2018

Mortgage Rate Projections

12/2018

QuarterFreddie

MacFannie Mae

MBA NARAverage

of All Four

2019 1Q 4.9 4.9 5.0 5.0 4.95

2019 2Q 5.0 4.9 5.1 5.1 5.03

2019 3Q 5.2 5.0 5.1 5.2 5.13

2019 4Q 5.3 5.0 5.1 5.3 5.18

2015Q1

2015Q2

2015Q3

2015Q4

2016Q1

2016Q2

2016Q3

2016Q4

2017Q1

2017Q2

2017Q3

2017Q4

2018Q1

2018Q2

2018Q3

2018Q4

2019Q1

2019Q2

2019Q3

2019Q4

Rate 3.7 3.8 4.0 3.9 3.7 3.6 3.5 3.8 4.2 4.0 3.9 3.9 4.3 4.6 4.6 4.8 4.9 5 5.2 5.3

Freddie Mac

Mortgage RatesFreddie Mac 30-Year Fixed Rate

- Actual- Projected

2015 2016 2017 2018 2019

4.95.0

5.25.3

Freddie Mac

2019 Q1

Where Are They Going In 2019?

January – Today Actual Interest Rates

2019 Q2

2019 Q3

2019 Q4Mortgage RatesFreddie Mac30-Year Fixed Rate

Mortgage Credit Availability

YES NO MAYBE

Apr 2013 Jan 2014 Jan 2015 Jan 2016 Jan 2017 Jan 2018

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 2005June 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 Oct 2018

Historic Data for the MORTGAGE CREDIT AVAILABILITY INDEX

(a report from the Mortgage Bankers Association)

MBA

45

46

47

45

43

42

43

44 44

45 45

46

Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct

Average Days To Close A Loan

All Closed Loans as per Ellie Mae

Last 12 Months

722 722

721 721

722

723

724

726

725

724

727 727

Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct

All Closed Loans as per Ellie Mae

FICO® Score RequirementsLast 12 months

0.07% 0.8%

8.7%

18.7%

23.9%

34.5%

13.4%

500-549 550-599 600-649 650-699 700-749 750-799 800+

FICO® Score Distribution

51.3%All Closed Loans as per Ellie Mae

Average FICO® Scorefor Closed Purchase Loans

by Loan Type

All Closed Loans as per Ellie Mae

727751

676

709

All Loans Conventional FHA VA

39 37

44 43

All Loans* Conventional FHA VA

Average Back End DTIfor Closed Purchase Loans by Loan Type

All Closed Loans as per Ellie Mae