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The Current Housing Market
Single-Family Housing Units Completed 4 Consecutive Years of a Record-Setting Number of Units
Average Annual Units Completed
14 Straight Years Below the 50-Year Average 1970
1975
1980
1985
1990
1995
2000
2005
2010
2015
2020
Source: Census
Showings Exceed Pre-Pandemic Numbers March Showing Index Over the Last Five Years
166.8
283.8
284.4
2021
2022
155.7 128.4
2018
2019
2020
Source: ShowingTime
Highest Showing Index in Over Two Years ShowingTime Monthly Index 284.4
283.8 281
271 254
236
191
153
241
236 205
200 199
190
185 182
178 176
166
160
185
176 174
156 156 128
85
J F 2020
M
A
M
J
J
A
S
O
N
D
J F 2021
M
A
M
J
J
A
S
O
N
D
J F 2022
M
Source: ShowingTime
Buyer Traffic Index March 2022
Source: NAR
Seller Traffic Index March 2022
Source: NAR
February 2022 Y-O-Y House Appreciation
CoreLogic Home Price Insights Report
Federal Housing Finance Agency House Price Index
+19.4% S&P Case-Shiller U.S. National Home Price Index
+20.0% +19.8%
Price Appreciation Is Accelerating % Year-Over-Year Price Increases by Month
17.2
19.1 18.5 18.0 18.1 18.0 18.0 18.1
20.0
20.9
15.4 13.0 10.0 10.4
Jan 2021
Feb
11.3
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan 2022
Feb
Mar
Source: CoreLogic
Mortgage Rates Average 30-Year Fixed Rate: January 2022 – Today 5.27 5.00
5.11 5.10
4.67 4.72 4.42 4.16 3.92 3.89 3.76
3.69 3.45 3.11 12/30
3.85
3.56 3.55 3.55
3.22
1/6
1/13
1/20
1/27
2/3
2/10
2/17
2/24
3/3
3/10
3/17
3/24
3/31
4/7
4/14
4/21
4/28
5/5
Source: Freddie Mac
While higher short-term interest rates will push up mortgage rates, I expect some of this impact to be mitigated eventually through lower inflation. . . . Thus, I expect the 30-year fixed mortgage rate to continue to rise, although we aren’t likely to see the big jumps that occurred over the past few weeks. - Nadia Evangelou, Director of Forecasting, NAR
Impact of Rising Rates on Home Prices Changes when mortgage rates rose by more than 1%
Start Date
End Date
Months
Increase
Home Prices
Oct 1993
Dec 1994
14
2.38%
+3%
Jan 1996
Sept 1996
8
1.20%
+2%
Oct 1998
May 2000
19
1.81%
+13%
June 2003
June 2004
12
1.06%
+13%
June 2005
July 2006
13
1.18%
+7%
Nov 2012
Dec 2013
13
1.11%
+11%
13
1.46%
+8%
Average
Source: Freddie Mac
With rates rising and expected to rise through 2023, it makes sense to obtain a purchase or refinance mortgage if you are in good standing.
- Len Kiefer, Deputy Chief Economist, Freddie Mac
Housing Inventory Is Increasing Months’ Supply 2022
2.0 1.6
January 2022
1.7
February 2022
March 2022 Source: NAR
What’s Ahead?
Worries of a Housing Bubble Still Persist % who say they believe there’s a housing price bubble where they live
77% 44%
Consumers
Agents Source: realtor.com
It’s very important to keep these numbers in context … We’re likely to continue seeing large year-over-year percentage increases for the rest of this year, but it’s also likely that foreclosure activity will remain below historically normal levels until the end of 2022. - Rick Sharga, Executive VP, RealtyTrac
Foreclosure Activity at an All-Time Low U.S. Properties with Foreclosure Filings: ATTOM 2021 Year-End Report 2.8M 2.9M
Over 1 Million 2.3M
1.9M 1.8M
1.3M
1.4M 1.1M 1.1M 933K
718K 533K
677K 624K 493K 214K
151K
78K
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Q1 Source: ATTOM Data Solutions
Foreclosure activity has continued to gradually return to normal levels . . . But even with the large year-over-year increase in foreclosure starts and bank repossessions, foreclosure activity is still only running at about 57% of where it was in Q1 2020, the last quarter before the government enacted consumer protection programs due to the pandemic. - Rick Sharga, EVP of Market Intelligence, ATTOM
Forbearance: Concerns vs. Reality 30%
8.6% 1.1% Initial Forecast
Actual Peak
Currently Source: First American, MBA
Loans in Forbearance Still Falling Percentage of Mortgages Currently in Forbearance 8.47% 8.39% 7.74% 7.2% 6.87%
5.83% 5.48% 5.53% 5.38%
5.22% 4.96% 4.47% 4.19% 3.91% 3.47%
3.26% 2.96% 2.21%
2.06% 1.41%
1.3%
1.2%
1.1%
May June July Aug Sept Oct Nov Dec Jan Feb Mar April May June July Aug Sept Oct Nov Dec Jan Feb Mar 20 21 22
Source: Mortgage Bankers’ Association
Loans Upon Exiting Forbearance Program 1.3% Short sales, deeds-in-lieu, repayment plans
37% were paid in full 44.6% were work outs or repayment plans 18.4% were still in trouble
17.1% No loss mitigation plan
18.9% Made their monthly payments during their forbearance period
6.7%
15.4%
11.4%
Modification
29.2% Cumulative forbearance exits for the period from June 1, 2020 through March 31, 2022
Loan paid off
Past due payments were brought current
Loan deferral
Source: Mortgage Bankers’ Association
Forbearances and seriously delinquent loans continue to decline to pre-pandemic levels, attributable to the strong housing market and loss mitigation activities implemented by policymakers, investors, and mortgage servicers.
- RADAR Group Report on Mortgage Forbearances & Delinquencies
This Is Nothing Like the Last Time Volume of Loans in Billions with a Credit Score < 620 400.00 350.00 300.00 250.00 200.00 150.00 100.00 50.00 0.00 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Q3 Source: Federal Reserve
In 2005, 2 out of 5 mortgages had adjustable rates… Less than 1 out of 100 in 2021. - Freddie Mac
Inventory of Homes Nothing Like Last Time Months’ Supply of Existing Homes for Sale in March of Each Year 2010
Four Years of the Housing 2008 Crash
9.8 7.4
Last Four Years
9.6 8.3
2007
(> 7 Months)
2006
3.8
Today 2007
2008
Buyers’ Market
2009
2010
2019
3.3
2.1 2.0 Sellers’ Market
2020
(<2021 6 Months) 2022
Source: National Association of Realtors
Home Price Forecasts for 2022 10.8%
10.4% 9.6%
9.0%
9%
8.4%
8.3%
6.2%
Average of Fannie Mae All 7 Forecasts
Freddie Mac
CoreLogic
HPES
NAR
Zelman
MBA
Cumulative House Appreciation by 2026 Forecast in Q1 2022
46.5%
Pre-Bubble
Bubble
26.8%
Recovery To Date
Bust
Optimists
All Panelists
10.3%
Pessimists Source: HPES
$96,342
Potential growth in household wealth over the next five years based solely on increasing home equity if you purchased a $360K home in January of 2022.
$411,000
$426,083
$440,613
$456,342
$392,400 $360,000 Pre-Bubble
Recovery To Date
Bubble
Bust Based on price appreciation projected by the Home Price Expectation Survey
2022
2023
2024
2025
2026
2027 Source: Q1 2022 HPES
Percent of Respondents Who Say It Is A Good Time To Buy 61% 59% 59% 59%
60%
59% 58% 57% 57% 56%
56%
61%
60%
59%
57%
56%
53%
54%
53%
52%
53%
52%52%
48%
48%
47%
35% 32%
32% 30% 29% 28%
28%
29%
26% 25%
Ma r-19
Apr- 19
Ma y-19
Jun- 19
Jul-1 9
Aug-1 9
Sep-1 9
Oct- 19
Nov-1 9
Dec-1 9
Jan- 20
Fe b-20
Ma r-20
Apr- 20
Ma y-20
Jun- 20
Jul-2 0
Aug-2 0
Sep-2 0
Oct- 20
Nov-2 0
Dec-2 0
Jan- 21
Fe b-21
Ma r-21
Apr- 21
Ma y-21
Jun- 21
Jul-2 1
Aug-2 1
Sep-2 1
Oct- 21
Nov-2 1
Dec-2 1
Jan- 22
24%
Fe b-22
Ma r-22
Source: Home Purchase Sentiment Index
Existing Home Sales Hit 15-Year Record Number of Existing Home Sales: 2019 – 2021
6,120,000 5,640,000 5,340,000
2019
2020
2021 Source: National Association of Realtors
1. Make your message simple and effective. 2. Remain hyper-relevant on the housing market.
Bottom Line
3. Mix your local market data with national data. 4. Have a relevant market opinion based upon facts. 5. Be the educator and share your message.
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