housing and economic outlook national association of local housing finance agencies april 26, 2012...
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Housing and Economic Outlook
National Association of Local Housing Finance AgenciesApril 26, 2012
David CroweChief Economist
Builder Sentiment Up since September 2011NAHB/Wells Fargo Housing Market Index
Jan-1
0
Feb-1
0
Mar
-10
Apr-10
May
-10
Jun-1
0
Jul-1
0
Aug-10
Sep-1
0
Oct
-10
Nov-10
Dec-1
0
Jan-1
1
Feb-1
1
Mar
-11
Apr-11
May
-11
Jun-1
1
Jul-1
1
Aug-11
Sep-1
1
Oct
-11
Nov-11
Dec-1
1
Jan-1
2
Feb-1
2
Mar
-12
Apr-12
0
10
20
30
25
Index
NAHB/Wells Fargo Housing Market Index
10q1 10q2 10q3 10q4 11q1 11q2 11q3 11q4 12q10
5
10
15
20
25
30Index, SA
April ‘12 = 25
Quarterly Data Message
Total Payroll Employment
07 08 09 10 11 12-1,000
-800
-600
-400
-200
0
200
400Thousands, Average monthly change
March ‘12 = 120K
Unemployment Rate
07 08 09 10 11 124
5
6
7
8
9
10
11% of Labor Force
March ‘12 = 8.2%
Total Personal Income
07 08 09 10 11 12-15%
-10%
-5%
0%
5%
10%
15%Annualized % change
Feb ‘12 = 2.6%
Real Gross Domestic Product
07 08 09 10 11-10
-8
-6
-4
-2
0
2
4
6Annualized % change
Consumer Confidence Index
07 08 09 10 11 1220
30
40
50
60
70
80
90
100
110
120Index, 1985=100
March ‘12 = 70.1
Single-family Building Permits
07 08 09 10 11 12250
350
450
550
650
750
850
950
1,050
1,150
1,250Thousands
March ‘12 = 462K
Multifamily Building Permits
07 08 09 10 11 12100
150
200
250
300
350
400
450
500Thousands
March ‘12 = 285K
Underlying Fundamentals
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
103,000
104,000
105,000
106,000
107,000
108,000
109,000
110,000
111,000
112,000
113,000
114,000
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
% Chg HHLDS # HHLDS Linear (# HHLDS) Linear (# HHLDS)
Number of Households
Percentage Change
(million households)
1 to 2 million gap
Household Shortfall Demographic Trends Are Positive
Housing Fundamentals Remain GoodMortgage Rates
78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 120
2
4
6
8
10
12
14
16
18
20
5.2
Percent
Fixed-Rate
Adjustable-Rate
3.2
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 112.0
2.5
3.0
3.5
4.0
4.5
5.0
5.5
6.0
4.7
3.2
3.2 average
House Prices At Long-term RatioHouse Price-to-Income Ratio
Markets Are Local
Seriously Delinquent Loans Trending Lower
05 06 07 08 09 10 110
1
2
3
4
5
6
7
8
9
10
11Mortgages 90+ days delinquent or in foreclosure, % of all loans
But Delinquency Inventory Varies by StateF
L
MD
DE
WA
NY
UT
OR
SC
NC MI
NM LA
ME
TN WI
AZ
MO
MS
KY
TX
OK
VT
WV
NE
SD
ND
0123456789
1011121314151617181920
Six states with more than oneyear’s inventory of distressed properties
24 states with less than six months inventoryof distressed properties
Foreclosure inventory plus 90-day+ delinquencies
U.S. = 8.4 months
Foreclosure inventory plus 90-day+ delinquencies month’s supply at annual sales rate
Increase in Employment Greater Than National Average
Change in Employment
Below U.S. average
0.6% to < 0.9%
0.9% to < 1.3%
1.3% to < 1.8%
1.8% or greater
Increase in Building Permits Greater Than National Average
Change in Building permits
Below U.S. average
6.7% to < 11.7%
11.7% to < 18.3%
18.3% to < 31.2%
31.2% or greater
Change in House Prices Relative to U.S.
Change in House prices
Below U.S. average
-4.2% to < -2.8%
-2.8% to < -1.7%
-1.7% to < -0.6%
-0.6% and greater
NAHB/First American Improving Markets Index – The Number of Markets is Improving
Sep 11 Oct 11 Nov 11 Dec 11 Jan 12 Feb 12 Mar 12 Apr 120
20
40
60
80
100
120
12
2330
41
76
98 99 101
AR Little Rock FL Tampa MD Cumberland NC Charlotte OH Springfield TX College Station
CA Fresno GA Rome Hagerstown Goldsboro OK Tulsa Dallas
CA Merced IA Ames ME Lewiston Greensboro OR Corvallis Laredo
CO Boulder Des Moines MI Detroit Greenville OR Portland Longview
Denver Dubuque Flint Rocky Mount PA Altoona McAllen
Fort Collins Iowa City Grand Rapids Winston-Salem Erie Midland
Greeley Sioux City Lansing ND Bismarck Lancaster Odessa
CT New Haven Waterloo Monroe Fargo Pittsburgh San Antonio
DC Washington ID Boise City Muskegon Grand Forks Williamsport Tyler
FL Cape Coral Coeur d’Alene Saginaw NE Lincoln SC Charleston Victoria
Crestview IN Elkhart MN Minneapolis NJ Ocean City Spartanburg UT Provo
Deltona Evansville MO Columbia NY Buffalo SD Sioux Falls St. George
Jacksonville Indianapolis Jefferson City Glens Falls TN Chattanooga VT Burlington
North Port Lafayette Joplin Rochester Kingsport WVHuntington
Orlando KY Louisville Kansas City Utica Nashville WYCasper
Panama City LA Lake Charles MS Jackson OH Columbus TX Amarillo Cheyenne
Punta Gorda Monroe NC Burlington Dayton Brownsville
101 Improving Metropolitan Areas
Improving Markets101 Improving Metropolitan Areas
Forecast
Real GDP Growth – Hesitated but Improving
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 130%
200%
400%
600%
800%
1000%
1200%Q/Q Percent Change, SAAR
Sales Dipped, But Due to RecoverNew and Existing Single-Family Home Sales
90 92 94 96 98 00 02 04 06 08 10 120
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
0.0
200.0
400.0
600.0
800.0
1,000.0
1,200.0
1,400.0
1,600.0Million
Existing (R)
New (L)
Million
Single-Family Starts – Waiting for Job Recovery
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 130
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000Thousands
Trough to Current:Mar 09 = 353,000Mar 12 = 462,000
+31%
1995-2003 1,256,000
2010 471,000
2011 433,000 -8%
2012 506,000 17%
2013 660,000 30%
Multifamily Housing Starts Healthy Response from Growth in Renters
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 130
150
300
450
600Thousands
Trough to Current:4th Q 09 = 82,0001st Q 12 = 192,000
134%
1995-2003 331,000
2010 114,000
2011 177,000 55%
2012 216,000 22%
2013 235,000 9%
Residential Remodeling – Continuous ImprovementOwner-Occupied Improvements
93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 60,000
70,000
80,000
90,000
100,000
110,000
120,000
130,000
140,000
150,000
YR 4Q/4Q Chg 3.5%12.0% 7.9%
Billions 2005 $, SAAR
Source: U.S. Census Bureau, NAHB Economic and Housing Forecast.
Long Road Back to Normal* for Single-Family Housing Starts – Q4 2013
* Normal is the average from Q1 2000 to Q4 2003
* Normal Production is measured as Single-Family housing starts between Q1 2000 and Q4 2003
Single-Family Housing StartsRelative to Normal
Less than 45%
45% to 49%
49% to 61%
61% to 70%
Greater than 70%
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