Fact vs Opinion

Do I have a relevant market opinion based upon facts?

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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