Housing Market Outlook: Prices, Credit, Metro Area Sales

JANUARY 19, 2016 || 1:00 – 2:00 PM

Presenter:

Frank E. Nothaft || CoreLogic, Vienna, VA

Market Insights: Prices, Credit, Metro Sales

• Home prices expected to rise 4-5% during 2016

• Mortgage rates gradually rise: 30-year fixed 4¼-4½% by yearend

• Credit eases slowly, remains ‘tight’ relative to 15-20 years ago

• Total home sales up 4-5% (existing up 3%, new up 13%)

• New sales volume and growth strongest in South and West

U.S. Home Prices Still 7% Below 2006 Peak

3

CoreLogic U.S. Home Price Index (January 2000 = 100)

70

90

110

130

150

170

190

210

230

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

- Forecast -

Projected to reach prior peak by mid-2017 (but still 17% below 2006 peak in real $)

37%7%

Source: CoreLogic Home Price IndexTM (January 5, 2016 Release)

Source: CoreLogic Home Price IndexTM (January 5, 2016 Release)

House Price Change By State, October 2014 to October 2015

3%

AL

2%

AK

≥ 7%

4 to 6%

-2 to 1%

2 to 3%

United States 6%

2%

AR6%

AZ

7%

CA

10%

CO

CT 1%

DC 4%

DE 2%

8%

FL

6%

GA

7%

HI

4%

IA

7%

ID

3%

IL

3%

IN

4%

KS KY 2%

0%

LA

0%

ME

4%

MI

4%

MN

5%

MO

-2%

MS

3%

MT

NC 5%

8%

ND

4%

NE

NJ 2%

1%

NM

8%

NV

5%

NY

4%

OH

3%

OK

9%

OR

2%

PA

RI 6%

7%

SC

5%

SD

TN 5%

7%

TX

7%

UT1%

VA

9%

WA

4%

WI

2%

WV

3%

WY

4%

2%

VT

3%

MD 1%

MA

NH

4

New-Home Price Compared to Existing Homes

5

Source: CoreLogic. Left: Difference between the new-home median sale price and resale home median price

(including distressed). Right: Percentage difference between new-home and resale median sale price.

New Home Price Premiums Close to $100,000…. …But in Percentage Terms New Home

Price Premiums Are Close to Early 2000s

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$40,000

$50,000

$60,000

$70,000

$80,000

$90,000

$100,000

20

012

002

20

032

004

20

052

006

20

0720

08

20

092

010

20

112

012

20

132

014

20

1520%

25%

30%

35%

40%

45%

50%

55%

60%

2001

2002

2003

2004

2005

2006

200

7

2008

2009

2010

2011

2012

2013

2014

2015

Larger New Houses Explain Some of the Price Difference

2,000

2,200

2,400

2,600

2,800

1995 1999 2003 2007 2011 2015

Square Feet of Floor Area (Average)

First 9 Months

Source: Census Bureau New Residential Construction (one-family completions, Table Q-6)

Mortgage Rates Expected To Rise in 2016

Source: Freddie Mac Primary Mortgage Market Survey®, IHS Global Insight January 2016

projection for 10-year Treasury and CoreLogic projection of unchanged FRM-Treasury spread.

3%

4%

5%

6%

7%

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

4.5%

GreatRecession

Forecast

Dec. 2016:

Interest Rate on 30-Year Fixed-Rate Mortgages (percent)

0

20

40

60

80

100

120

2001 2003 2005 2007 2009 2011 2013 2015

Housing Credit Index (2001Q1=100)

Underwriting Remains Cautious

2015Q3

33

HCI Factors

Credit Score

Loan-to-Value

Debt-to-Income

Broker Share

Documentation (Full/Low/No)

Non-Owner Occupancy Share

Source: CoreLogic TrueStandings, 2001Q1 = 100. Bars represent 2001 and 2008-2009 recessions.

Underwriting Remains Cautious

LTV Share 95 And Above

DTI Share 43And AboveLow & No Doc

Share

Broker Share

0

20

40

60

80

100

120

140

Credit Score Less Than 640

Non-Owner Occupancy Share

Source: CoreLogic TrueStandings, 2015 purchase-money originations compared with 2000 - 2002

Purchase Orig.

2000-2002 (Blue)

2015 (Red)

New-Home Sales: Project 13% Increase in 2016

10 Source: CoreLogic

Monthly Home Sales (number)

20

0

20000

40000

60000

80000

100000

120000

140000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

New Home Sales

New-Home Sales Levels Highest in the South

11

Average Monthly Number of New Sales Last 12 Months

Source: CoreLogic. Left: avg monthly new homes sold Oct-14 - Sep-15; Right: new-home share of sales Oct-14 – Sept-15; top CBSAs based on new & existing sales.

New Home Sale Share

Based on the Top 100 Home-Sales Markets (CBSAs)

49

0 500 1,000 1,500 2,000 2,500

Houston TX

Dallas TX

Atlanta GA

Phoenix AZ

Austin TX

San Antonio TX

Washington DC

Charlotte NC-SC

Orlando FL

Denver CO

Tampa FL

New York NY-NJ

Las Vegas NV

Nashville TN

Riverside CA

Raleigh NC

Fort Worth TX

0% 5% 10% 15% 20% 25%

Raleigh NC

Austin TX

Myrtle Beach SC-NC

San Antonio TX

Charleston SC

Houston TX

Provo UT

Columbia SC

Charlotte NC-SC

Baton Rouge LA

Dallas TX

Jacksonville FL

Lakeland FL

Fresno CA

Nashville TN

Orlando FL

Oklahoma City OK

Highest Growth New-Home Markets (top 100 metros)

Source: CoreLogic Left: Percent change, number of new-home sales Oct-14–Sept-15 vs. Oct-13–Sep-14; Right: Avg monthly sales Oct-14–Sep-15 vs. Oct-00–Sep-01.

Fastest Growing Markets Over Last 12 Months

18

-80% -30% 20% 70%

Nashville TNSan Antonio TX

Austin TXHouston TXRaleigh NC

Jacksonville FLDallas TX

Charlotte NC-SCSeattle WA

Tampa FLNew York NY-NJ

Fort Worth TXOrlando FL

Portland OR-WAWashington DC

Denver COPhoenix AZ

Riverside CAAtlanta GA

Las Vegas NV

Comparison of Today’s Sales vs. Early 2000s

0% 5% 10% 15% 20% 25% 30% 35%

Provo UTWorcester MA-CT

Nashville TNPhiladelphia PA

Lakeland FLSacramento CA

RiversideCADenver COTucson AZMiami FL

Cape Coral FLFort Lauderdale FL

Atlanta GAVirginia Beach VA-NC

Tampa FLPortland OR-WA

Urban Honolulu HIDes Moines IA

Palm Bay FLBaton Rouge LA

Where to find more information

Image

Image

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The views, opinions, forecasts and estimates herein are those of the CoreLogic Office of the

Chief Economist, are subject to change without notice and do not necessarily reflect the position

of CoreLogic or its management. The Office of the Chief Economist makes every effort to

provide accurate and reliable information, however, it does not guarantee accuracy,

completeness, timeliness or suitability for any particular purpose.

CORELOGIC and the CoreLogic logo are trademarks of CoreLogic, Inc. and/or its subsidiaries.

Important disclosure

Look for regular updates to our housing forecast, commentary and data at

http://www.corelogic.com/about-us/research.aspx

Twitter: @CoreLogicEcon @DrFrankNothaft

David W. Berson

Natonwide Mutual

Insurance Co.

614.677.2994

1 Nationwide Blvd.

Columbus, OH 43128

Speaker Contacts:

David Crowe

NAHB

202.266.8383

1201 15th St. NW

Washington, DC20005

Head Shot

Frank E. Nothaft

CoreLogic

703.610.5036

8229 Boone Blvd.

Vienna, VA 22182

Head Shot

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