Market update July 2023 by Howard Flaschen

July

2023

Confidence is contagious. So is lack of confidence.

Vince Lombardi

2023 Housing at Midyear

Good News

§ Housing is normalizing after two unprecedented “unicorn years”

§ Return of seasonality is a welcome sign

§ Prices are rebounding

Reality Check

§ Homeowners have limited options between rates & inventory

§ New listings are still declining

§ Affordability remains primary challenge

Outlook

§ New construction is growing, offering more options for buyers and sellers

§ Expect a moderately active summer season

Buyer Demand Returns

Housing Sentiment in Q2 of 2023

Market Activity, Survey Conducted May 11-20, 2023

18%

16% say they are likely to buy a home in the next 6 months.

of homeowners say they are likely to sell in the next 6 months.

Source: Freddie Mac

Average Credit Score in the U.S. Is Healthy

Source: Experian

689 689 693 691 693 695 699 699 701 703 712 714 714 675 680 685 690 695 700 705 710 715 720 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Credit Score for Housing Borrowers Is High

765 is the median credit score in the U.S. for those taking out a mortgage

Source: NY Fed, Q1 2023

The New Normal: Mortgage Rates in 6% -

7% Range

30-Year Fixed Rate, October 2022–Today

Source: Freddie Mac

6.92 6.94 7.08 6.95 7.08 6.61 6.58 6.49 6.33 6.31 6.27 6.42 6.48 6.33 6.15 6.13 6.09 6.12 6.32 6.50 6.65 6.73 6.6 6.42 6.32 6.28 6.27 6.39 6.43 6.39 6.35 6.39 6.57 6.79 6.71 6.69 6.67 10/13 11/3 11/23 12/15 1/5/2023 1/26 2/16 3/9 3/30 4/20 5/11 6/1 6/22 6. 71 U.S. Weekly Averages as of 06/29/2023

6/29

Mortgage rates heavily influence the direction of home sales. Relatively steady rates have led to several consecutive months of consistent home sales.

- Lawrence Yun, Chief Economist, NAR

Existing Home Sales Steady

Since January 2014

Source: NAR

0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 4,000,000 4,500,000 5,000,000 5,500,000 6,000,000 6,500,000 7,000,000 Jan 2014 Jan 2015 Jan 2016 Jan 2017 Jan 2018 Jan 2019 Jan 2020 Jan 2021 Jan 2022 Jan 2023 May 2023: 4.3M | +0.2% MoM 2014–19 Average: 5.3 Million

Existing Home Sales Distribution

Percent by Price Bracket

Source: NAR

4.2% 19.2% 45.0% 18.0% 6.8% 6.9% $0-100K $100-250K $250-500K $500-750K $750K-1M $1M+

Available inventory strongly impacts home sales, too. . . . existing-home sales activity is down sizably due to the current supply being roughly half the level of 2019.

- Lawrence Yun, Chief Economist, NAR

Months Inventory of Homes for Sale

Source: NAR

2011 - Today 3.0 1.5 2.5 3.5 4.5 5.5 6.5 7.5 8.5 9.5 January 2011 January 2012 January 2013 January 2014 January 2015 January 2016 January 2017 January 2018 January 2019 January 2020 January 2021 January 2022 January 2023

2011–19 Average: 5 Months

Supply Improves But Remains Limited

There were 7.1% more homes for sale in June compared to the same time in 2022. This means that there were 41,000 more homes available to buy on a typical day this past month compared to one year ago. However, the inventory growth rate for homes actively for sale continued to slow for the fourth month in a row . . . - Realtor.com

Active Listings Improve

Counts Since January 2017

May 2021

May 2022

Source: Realtor.com

200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 Jan-17 Mar May July Sept Nov Jan-18 Mar May July Sept Nov Jan-19 Mar May July Sept Nov Jan-20 Mar May July Sept Nov Jan-21 Mar May July Sept Nov Jan-22 Mar May July Sept Nov Jan-23 Mar May

Number

Source: Realtor.com

15% 7% -17% 11% -42% -59% -63% -61% South Midwest Northeast West Last Year Pre-Pandemic

of Homes for Sale in June 2023 Monthly Active Listing Counts vs. Last Year and Pre-Pandemic 2017–19

In the final week of June, we noted that inventory actually declined on a year-overyear basis for the first time since last April. This substantial slowdown was primarily driven by fewer potential sellers opting to list their home and the market which lapped the period of higher inventory growth that started in May of last year.

- Realtor.com

Source: Realtor.com

for 13 Months in a Row Active and New Listings Each Month 377 346 354 380 479 573 691 726 731 752 750 680 616 579 562 563 582 614 324 368 435 496 526 533 472 418 394 360 295 216 287 305 342 385 407 396 Jan 2022 Feb Mar Apr May June July Aug Sept Oct Nov Dec Jan 2023 Feb Mar Apr May June Active Listings New Listings

Active Listings Greater Than New Listings

In June, the number of homes newly-listed for sale declined by 25.7% compared to the same time last year. . . . new listings remained 27.6% below prepandemic 2017 to 2019 levels.

In fact, the pace of new home listings year to date is even 16.4% lower than in the first half of 2020 when the real estate market was still contending with pandemic-era closures, restrictions, and uncertainties, highlighting just how short-on-newoptions buyers in today’s market really are.

- Realtor.com

New Listings Now Below Previous Years

New Monthly Listing Counts

200,000 250,000 300,000 350,000 400,000 450,000 500,000 550,000 600,000 650,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2017 2018 2019 2020 2021 2022 2023 Source: Realtor.com

June 2023 396,082

Y-O-Y

-25.7%

- Tom Barkin, President, Federal Reserve Bank of Richmond

I didn’t fully anticipate how much the move in interest rates would convince people not to put their houses on the market.

New Listings Down in 99% of Country

Percent Change in New Listings for the Top 200 Metros

% of Metros Where New Listings Increased or Were Unchanged

% of Metros Where New Listings Decreased

99%

Source: Realtor.com

History has shown that higher rates may take the steam out of rising prices, but it doesn’t cause them to collapse entirely. This is especially true in today’s housing market, where the demand for homes continues to outpace supply, keeping the pressure on house prices.

- Mark Fleming, Chief Economist, First American

Home Prices Rebound, Reflecting Market Dynamic

Rising Rates Led to Headlines Calling for Another Crash

Source: Realtor.com Realtor.com Listing Price:

What Buyers See

50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 500,000 202001 202002 202003 202004 202005 202006 202007 202008 202009 202010 202011 202012 202101 202102 202103 202104 202105 202106 202107 202108 202109 202110 202111 202112 202201 202202 202203 202204 202205 202206 202207 202208 202209 202210 202211 202212 202301 202302 202303 202304 202305 202306 June 2022 - PEAK Rates go from 5.5% to 7.0%

The Big Surprise of 2023 Is Stabilizing Prices and Rising Momentum

Source: Realtor.com Realtor.com Listing Price:

What Buyers See

Listing Price Growth Reflects Market and Return of Seasonality

Monthly Median Listing Price

Source: Realtor.com

$368,820 $449,000 $200,000 $250,000 $300,000 $350,000 $400,000 $450,000 $500,000 Jan 17 Mar May Jul Sept Nov Jan 18 Mar May Jul Sept Nov Jan 19 Mar May Jul Sept Nov Jan 20 Mar May Jul Sept Nov Jan 21 Mar May Jul Sept Nov Jan 22 Mar May Jul Sept Nov Jan 23 Mar May June 2023 $445,000 -0.9% Y-O-Y

Percent Change in Home Values

Month-Over-Month, Case-Shiller & FHFA (SA), CoreLogic (NSA)

Source: Case-Shiller, FHFA, CoreLogic

1.6 1.9 2 1.6 1.3 0.4 -0.3 -0.9 -0.8 -0.2 -0.3 -0.3 -0.2 0.2 0.4 0.5 Case-Shiller 1.6 1.9 1.5 1.6 1.2 0.1 -0.6 -0.7 0.1 0 -0.1 -0.3 0.1 0.5 0.6 0.7 FHFA 1.4 2.2 3.3 2.6 1.8 0.6 -0.3 -0.7 -0.5 -0.1 -0.2 -0.4 -0.2 0.8 1.6 1.2 Jan '22 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan '23 Feb Mar Apr

CoreLogic

If I were trying to make a case that the decline in home prices that began in June 2022 had definitively ended in January 2023, April’s data would bolster my argument.

- Craig J. Lazzara, Managing Director, S&P DJI

Home Price Expectations Rebound in 2023

Consumer Expectations for % Home Price Change in Next 12 Months

Source: NY Fed

4.1 2.8 2.6 1.1 2.4 1.2 2.7 2.8 4.2 4.1 Aug 2022 Sept Oct Nov Dec Jan 2023 Feb Mar Apr May

Rising New Construction Offers More Options

New Residential Starts Jump 22% in May

In Thousands of Units, Seasonally-Adjusted Annual Rate

Source: Census

1.6 M 0 500 1000 1500 2000 2500 2000 Jan 2001 Jan 2022 Jan 2003 Jan 2004 Jan 2005 Jan 2006 Jan 2007 Jan 2008 Jan 2009 Jan 2010 Jan 2011 Jan 2012 Jan 2013 Jan 2014 Jan 2015 Jan 2016 Jan 2017 Jan 2018 Jan 2019 Jan 2020 Jan 2021 Jan 2022 Jan 2023 Jan 2000-07: 1.7 M 1960-99: 1.5 M 2008-14: 766 K

Single-Family Housing Starts Pick Up

Source: Census

Summer In Thousands of Units, Seasonally-Adjusted Annual Rate 1,067 1,010 898 919 887 858 804 887 823 835 843 841 997 447 543 458 566 559 560 609 461 506 588 515 487 624 2022 May June July Aug Sep Oct Nov Dec 2023 Jan Feb Mar Apr May

unit 5 units or more

Toward

Southern Region Leads Housing Starts

Source: Census

Thousands of Units, Seasonally-Adjusted Annual Rate 100 282 908

341 Northeast Midwest South West

New Residential Completions Increase

Thousands of Units, Seasonally-Adjusted Annual Rate

Source: Census

1.5 M 0 500 1000 1500 2000 2500 2000 Jan 2001 Jan 2022 Jan 2003 Jan 2004 Jan 2005 Jan 2006 Jan 2007 Jan 2008 Jan 2009 Jan 2010 Jan 2011 Jan 2012 Jan 2013 Jan 2014 Jan 2015 Jan 2016 Jan 2017 Jan 2018 Jan 2019 Jan 2020 Jan 2021 Jan 2022 Jan 2023 Jan 2000-07: 1.7 M 1960-99: 1.5 M

778 K

2008-14:

Single-Family Housing Completions Steady

Thousands of Units, Seasonally-Adjusted Annual Rate

Source: Census

1,043 1,009 1,004 1,020 1,048 974 1,102 9951,018 1,029 1,035 971 1,009 398 377 387 328 387 357 431 381350 542 480 397 493 2022 May June July Aug Sep Oct Nov Dec 2023 Jan Feb Mar Apr May 1 unit 5 units or more

Outlook

Housing prices continue to show stronger growth than what was previously expected. . . .

Housing's performance is a testimony to the strength of demographic-related demand in the face of Baby Boomers aging in place and Gen-Xers locking in historically low rates, both of which have helped keep housing supply at historically low levels. Homebuilders continue to add to that supply, but years of meager homebuilding over the past business cycle means the imbalance will likely continue for some time. We do expect housing will be supportive of the overall economy . . .

- Doug Duncan, Senior VP and Chief Economist, Fannie Mae

Midyear Takeaways

Good News

§ Buyers are active as housing is normalizing

§ Prices are rebounding

Reality Check

§ Affordability remains a challenge and homeowners have limited options

Outlook

§ New construction is growing, offering more options for buyers and sellers

§ With rebounding prices, homeowners ready to move are in a solid position

Inaction breeds doubt and fear. Action breeds confidence and courage. If you want to conquer fear, do not sit home and think about it. Go out and get busy.

- Dale Carnegie, Author

Talking to Homeowners Makes a Difference

64.5% of Potential Sellers Were More Inclined To Sell Afterwards

Percent of homeowners who desired to sell their home within six months who were more inclined to do so after speaking to an agent

64.5%

Source: 1000watt

Agent

90-Day Plan

• Talk with homeowners looking to move

• Engage with buyers

• Discuss rebound in prices

• Explore expired listings/FSBOs

• Plan and enjoy vacation time

https://www.msn.com/en-us/money/markets/whyeconomies-havent-slowed-more-since-central-banks-hitthe-brakes

https://blog.firstam.com/economics/why-higher-mortgagerates-dont-always-lead-to-declining-house-prices/

Resources Slide(s) Description Link(s) 5 Housing Sentiment https://www.freddiemac.com/research/consumerresearch/20230621-housing-sentiment-2Q23 6 Average Credit Score https://www.experian.com/blogs/ask-experian/what-is-theaverage-credit-score-in-the-u-s/ 7 Homebuyer Credit Score https://www.newyorkfed.org/microeconomics/hhdc/backgro und.html 8 Mortgage Rates http://www.freddiemac.com/pmms/ 9, 12 Yun Quotes https://www.nar.realtor/newsroom/existing-home-sales-

10, 11, 13 Existing Home Sales https://www.nar.realtor/topics/existing-home-sales 15-21, 23 Realtor.com Inventory https://www.realtor.com/research/june-2023-data/ 22 Barkin Quote

24 Fleming Quote

edged-higher-by-0-2-in-may

https://www.spglobal.com/spdji/en/documents/indexnews/a nnouncements/20230627-1464869/1464869_cshomepricerelease-0627.pdf

https://www.spglobal.com/spdji/en/indices/indicators/spcorelogic-case-shiller-us-national-home-price-nsaindex/#news-research

https://www.fhfa.gov/DataTools/Downloads/Pages/HousePrice-Index.aspx

https://www.corelogic.com/category/intelligence/reports/ho me-price-insights/

https://www.fanniemae.com/newsroom/fannie-maenews/mixed-data-complicates-economic-forecast-thoughrecession-remains-likely

https://mailchi.mp/1000watt/the-dose-good-or-bad-newsfirst-2417845?e=d1ba443386

Resources Slide(s) Description Link(s) 26 – 28 Realtor.com Prices https://www.realtor.com/research/data/ 29 Lazzara Quote

30 Change in Home Values

31 Home Price Expectations https://www.newyorkfed.org/microeconomics/sce#/hpexp-1 33 – 37 New Construction https://www.census.gov/construction/nrc/current/index.html 38 Duncan Quote

41 Talking to Homeowners

Updates

https://www.nar.realtor/research-and-statistics/researchreports/realtors-confidence-index

http://www.census.gov/construction/nrs/pdf/newressales.pdf

http://www.census.gov/newhomesales

http://www.census.gov/construction/nrs/pdf/newressales.pdf

https://www.nar.realtor/topics/existing-home-sales

https://www.nar.realtor/research-and-statistics/housingstatistics/pending-home-sales

https://www.spglobal.com/spdji/en/indices/indicators/spcorelogic-case-shiller-20-city-composite-home-price-nsaindex/#news-research

https://www.corelogic.com/intelligence/u-s-home-priceinsights/

Resources Slide(s) Description Link(s) 49 Confidence Index

50-52, 60, 62, 63, 69-74 Existing Home Sales https://www.nar.realtor/topics/existing-home-sales 53-56 New Home Sales

57 Total Home Sales

58, 59 Pending Home Sales

64-66 Case Shiller

67 CoreLogic Price Forecast

http://www.freddiemac.com/research/forecast/

resources/research-and-economics/forecasts-andcommentary

http://www.fanniemae.com/portal/researchinsights/forecast.html

https://www.mba.org/news-research-andresources/research-and-economics/forecasts-andcommentary

https://www.nar.realtor/research-and-statistics

https://www.mba.org/news-research-andresources/newsroom

https://www.mba.org/news-research-andresources/research-and-economics/single-familyresearch/mortgage-credit-availability-index

Resources Slide(s) Description Link(s) 69-76 Inventory https://www.nar.realtor/topics/existing-home-sales http://www.census.gov/construction/nrs/pdf/newressales.pdf https://www.realtor.com/research/data/ 86 Showing Activity https://www.showingtime.com/blog/ 80, 81, 83, 84 Mortgage Rates http://www.freddiemac.com/pmms/pmms_archives.html

https://www.mba.org/news-research-and-

82 Mortgage Rate Projections

86, 87 Mortgage Credit Availability

Home Sales

Average Days on the Market May

46 49 44 36 24 26 27 29 31 31 36 38 41 41 36 29 27 26 24 22 22 21 21 21 21 20 18 17 17 17 17 17 17 18 18 19 19 18 17 17 16 14 14 16 19 24 26 33 34 29 22 18 Jan-19 Feb Mar Apr May June July Aug Sept Oct Nov Dec Jan-20 Feb Mar Apr May June July Aug Sept Oct Nov Dec Jan-21 Feb Mar Apr May June July Aug Sept Oct Nov Dec Jan-22 Feb Mar Apr May June July Aug Sept Nov Dec Jan-23 Feb Mar Apr May Source: NAR

2023

Existing Home Sales

Since January 2014

Source: NAR

3,800,000 4,300,000 4,800,000 5,300,000 5,800,000 6,300,000 6,800,000 Jan 2014 Jan 2015 Jan 2016 Jan 2017 Jan 2018 Jan 2019 Jan 2020 Jan 2021 Jan 2022 Jan 2023

Existing Home Sales

Year-Over-Year, by Region

Source: NAR

-20.4% -25.4% -20.8% -16.5% -25.5% U.S.

South

Northeast Midwest

West

Existing Home Sales

Source: NAR

In Thousands 0 100 200 300 400 500 600 January February March April May June July August September October November December 2021 2022 2023

New Home Sales

Source: Census

In Thousands 0 10 20 30 40 50 60 70 80 90 January February March April May June July August September October November December 2021 2022 2023

New Home Sales

Source: Census

Annualized in Thousands 360 460 560 660 760 860 960 1060 jun-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20 Jan-21 Jan-22 Jan-23

New Home Sales

Percent of Distribution by Price Range

* Less Than 500 Units or Less Than 0.5 Percent

Source: Census

0% 1% 16% 27% 21% 24% 11% Under $150K $150-$199K $200-299K $300-$399K $400-$499K $500-$749K Over $750K *

New Homes Selling Fast

Median Months from Completion to Sold

Source: Census

3.2 3.6 3.6 3.4 3.5 3.6 3.4 3.2 3.5 3.1 3.2 3.0 3.4 3.4 3.4 3.3 3.6 4.2 4.3 4.5 4.5 4.2 4.0 3.6 3.2 3.7 5.1 4.9 4.5 4.1 4.5 3.6 3.1 2.5 2.9 3.2 2.8 2.7 3.5 3.5 2.8 2.9 2.4 1.9 1.5 1.5 1.7 1.9 2.4 2.6 2.8 2.7 2.7 Jan-19 Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan-20 Feb Mar Apr May June July Aug Sept Oct Nov Dec Jan-21 Feb Mar Apr May June July Aug Sept Oct Nov Dec Jan-22 Feb Mar Apr May June July Aug Sept Oct Nov Dec Jan-23 Feb Mar Apr May

Total Home Sales

Source: Census

In Thousands 443 436 567 587 593 676 646 631 604 577 557 574 422 423 524 517 557 575 495 528 477 419 372 374 286 325 422 397 481 January February March April May June July August September October November December 2021 2022 2023

Pending Home Sales

Source: NAR

60 70 80 90 100 110 120 130 140 January 2012 January 2013 January 2014 January 2015 January 2016 January 2017 January 2018 January 2019 January 2020 January 2021 January 2022 January 2023 100 =

Historically Healthy Level

Pending Home Sales

Year-Over-Year by Region

Source: NAR

100 = Historically Healthy Level -22.2% -21.9% -23.5% -19.6% -26.6% U.S. Northeast Midwest South West

Percentage of Distressed Property Sales

Distressed Sales (Foreclosures and Short Sales) represented 2% of Sales in May.

Source: NAR

0% 5% 10% 15% 20% 25% 30% 35% Jan 2012 Jan 2013 Jan 2014 Jan 2015 Jan 2016 Jan 2017 Jan 2018 Jan 2019 Jan 2020 Jan 2021 Jan 2022 Jan 2023 4%

Home Prices

Sales Price of Existing Homes

Year-Over-Year, by Region

-3.1% 2.5% 1.1% -2.7% -5.7% Northeast Midwest

NAR

Source:

South West U.S.

% Change in Sales

Year-Over-Year, by Price Range

Source: NAR

$0-100K $100-250K $250-500K $500-750K $750K-1M $1M+ % change in sales -2.7% -17.8% -11.8% -19.9% -21.3% -22.3% -2.7% -17.8% -11.8% -19.9% -21.3% -22.3%

Change in Home Prices

Year-Over-Year

Source: S&P Case-Shiller

0% 5% 10% 15% 20% Jun 2012 Jan 2013 Jan 2014 Jan 2015 Jan 2016 Jan 2017 Jan 2018 Jan 2019 Jan 2020 Jan 2021 Jan 2022 Jan 2023

Change in Home Prices

Year-Over-Year, 20 City Composite

Source: S&P Case-Shiller 0% 5% 10% 15% 20% Jan 2014 Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan 2015 Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan 2016 Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan 2017 Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan 2018 Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan 2019 Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan 2020 Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan 2021 Feb Mar Apr May June July Aug Sept Oct Nov Dec Jan 2022 Feb Mar Apr May June July Aug Sept Oct Nov Dec Jan 2023 Feb Mar Apr

Change in Home Prices

Year-Over-Year, 20 City Composite

Source:

Case-Shiller

S&P

21.1% 21.2% 20.5% 18.7% 16.0% 13.1% 10.4% 8.6% 6.8% 4.6% 2.6% 1.0% 1.6% 1.7% Mar Apr May June July Aug Sept Oct Nov Dec Jan 2023 Feb Mar Apr

Year-Over-Year % Change in Price

Source: CoreLogic

US Home Price Insights – April 2023

Current Forecast

2.0% 4.6%

Housing Inventory

Change in Inventory

Month-Over-Month, June 2023

Source: realtor.com

Months Inventory of Homes for Sale

Source: NAR

2011 - Today 1.5 2.5 3.5 4.5 5.5 6.5 7.5 8.5 9.5 January 2011 January 2012 January 2013 January 2014 January 2015 January 2016 January 2017 January 2018 January 2019 January 2020 January 2021 January 2022 January 2023

Months Inventory of Homes for Sale

Source: NAR

3.8 3.6 3.8 4.2 4.3 4.3 4.2 4.0 4.0 3.9 3.7 3.0 3.1 3.1 3.3 4.0 4.6 3.9 3.1 3.0 2.7 2.5 2.3 1.9 1.9 2.0 2.1 2.3 2.5 2.5 2.6 2.6 2.4 2.4 2.1 1.7 1.6 1.7 1.9 2.2 2.6 2.9 3.2 3.2 3.2 3.3 3.3 2.9 2.9 2.6 2.6 2.9 3.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0 Jan-19 Feb Mar Apr May June July Aug Sept Oct Nov Dec Jan-20 Feb Mar Apr May June July Aug sept Oct Nov Dec Jan-21 Feb Mar Apr May June July Aug Sept Oct Nov Dec Jan-22 Feb Mar Apr May June July Aug Sept Oct Nov Dec Jan-23 Feb Mar Apr May

Since 2019

Months Inventory of Homes for Sale

Last 12 Months

Source: NAR

2.9 3.2 3.2 3.2 3.3 3.3 2.9 2.9 2.6 2.6 2.9 3.0 0 1 2 3 4 5 6 June July Aug Sept Oct Nov Dec Jan-23 Feb Mar Apr May

Year-Over-Year Inventory Levels

Source: NAR

-30% -20% -10% 0% 10% 20% 30% January 2014 January 2015 January 2016 January 2017 January 2018 January 2019 January 2020 January 2021 January 2022 January 2023

Year-Over-Year Inventory Levels

Last 12 Months

Source: NAR

2.4% 0.0% 0.0% -0.8% -0.8% 2.7% 10.2% 15.3% 15.3% 5.4% 1.0% -6.1% June July Aug Nov Dec Jan-23 Feb Mar Apr Sept Oct May

New Home Monthly Inventory

Seasonally Adjusted, Last 13 Months

Source: Census

8.3 9.5 10.1 8.7 9.7 9.7 9.4 8.5 8.1 8.4 7.9 7.6 6.7 May June Jul Aug Sept Oct Nov Dec Jan 23 Feb Mar Apr May

New Home Monthly Inventory

Non-Seasonally Adjusted

Source: Census

5.6 5.5 5.9 7.6 7.6 9.5 10.4 9.2 10.7 10.9 11.4 9.7 7.9 7.6 6.7 7.1 5.8 Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec 2022 2023

Buyer Demand

Showing Traffic Returns to Seasonal Trends, Remaining Elevated Above Pre-Pandemic Levels

Year-Over-Year Increase in Showing Activity, May 2023

Michael Lane, Vice President & General Manager, Showing Time

“The inventory squeeze continues to make itself known in showing activity, with lower listing volume translating to fewer showings. Showing traffic and pending sales activity in the coming weeks will indicate where the market might be headed as summer begins in full swing.”

Source: ShowingTime

5.2% 13.1% 3.8% -3.8% -7.7% U.S. Northeast Midwest South West

Mortgage Rates

Mortgage Rates

30-Year Fixed Rate, January 2018–Today

2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0 6.5 7.0 7.5 8.0 1/4/2018 2/1/2018 3/1/2018 3/29/2018 4/26/2018 5/24/2018 6/21/2018 7/19/2018 8/16/2018 9/13/2018 10/11/2018 11/8/2018 12/6/2018 1/3/2019 1/31/2019 2/28/2019 3/28/2019 4/25/2019 5/23/2019 6/20/2019 7/18/2019 8/15/2019 9/12/2019 10/10/2019 11/7/2019 12/5/2019 1/2/2020 1/30/2020 2/27/2020 3/26/2020 4/23/2020 5/21/2020 6/18/2020 7/16/2020 8/13/2020 9/10/2020 10/8/2020 11/5/2020 12/3/2020 12/31/2020 1/28/2021 2/25/2021 3/25/2021 4/22/2021 5/20/2021 6/17/2021 7/15/2021 8/12/2021 9/9/2021 10/7/2021 11/4/2021 12/2/2021 12/30/2021 1/27/2022 2/24/2022 3/24/2022 4/21/2022 5/19/2022 6/16/2022 7/14/2022 8/11/2022 9/8/2022 10/6/2022 11/3/2022 12/1/2022 12/29/2022 1/26/2023 2/23/2023 3/23/2023 4/20/2023 5/18/2023 6/15/2023 Source: Freddie Mac

6.81%

Mortgage Rates

30-Year Fixed Rate, January 2016–Today

2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0 6.5 7.0 7.5 8.0 1/7/2016 2/7/2016 3/7/2016 4/7/2016 5/7/2016 6/7/2016 7/7/2016 8/7/2016 9/7/2016 10/7/2016 11/7/2016 12/7/2016 1/7/2017 2/7/2017 3/7/2017 4/7/2017 5/7/2017 6/7/2017 7/7/2017 8/7/2017 9/7/2017 10/7/2017 11/7/2017 12/7/2017 1/7/2018 2/7/2018 3/7/2018 4/7/2018 5/7/2018 6/7/2018 7/7/2018 8/7/2018 9/7/2018 10/7/2018 11/7/2018 12/7/2018 1/7/2019 2/7/2019 3/7/2019 4/7/2019 5/7/2019 6/7/2019 7/7/2019 8/7/2019 9/7/2019 10/7/2019 11/7/2019 12/7/2019 1/7/2020 2/7/2020 3/7/2020 4/7/2020 5/7/2020 6/7/2020 7/7/2020 8/7/2020 9/7/2020 10/7/2020 11/7/2020 12/7/2020 1/7/2021 2/7/2021 3/7/2021 4/7/2021 5/7/2021 6/7/2021 7/7/2021 8/7/2021 9/7/2021 10/7/2021 11/7/2021 12/7/2021 1/7/2022 2/7/2022 3/7/2022 4/7/2022 5/7/2022 6/7/2022 7/7/2022 8/7/2022 9/7/2022 10/7/2022 11/7/2022 12/7/2022 1/7/2023 2/7/2023 3/7/2023 4/7/2023 5/7/2023 Source: Freddie Mac

6.81%

Mortgage Rate Projections

July 2023 Quarter Fannie Mae MBA NAR Average of All Three 2023 Q3 6.60% 6.20% 6.10% 6.30% 2023 Q4 6.30% 5.80% 5.80% 5.97% 2024 Q1 6.10% 5.60% 5.60% 5.77% 2024 Q2 5.90% 5.40% 5.60% 5.63%

Mortgage

January 2019 – Today Actual Interest Rates

2.0 3.0 4.0 5.0 6.0 7.0 8.0 2019 1/31 3/7 4/4 5/2 6/6 7/3 8/1 9/5 10/3 11/7 12/5 2020 2/6 3/5 4/2 5/7 6/4 7/2 8/6 9/3 10/1 11/5 12/3 2021 2/4 3/4 4/1 5/6 6/3 7/1 8/5 9/2 10/7 11/4 12/2 2022 2/3 3/3 4/7 5/5 6/2 7/7 8/4 9/1 10/6 11/3 12/1 1/5 2/2 3/2 4/6 5/4 6/1 7/6 6.2 5.8 5.6 5.4 2023 Q3 2023 Q4 2024 Q1 2024 Q2

Source: Freddie Mac, MBA

Rates 30-Year Fixed Rate

Where Are They Going?

Mortgage Rates

30-Year Fixed Rate

Source: MBA

2018 Q1 2018 Q2 2018 Q3 2018 Q4 2019 Q1 2019 Q2 2019 Q3 2019 Q4 2020 Q1 2020 Q2 2020 Q3 2020 Q4 2021 Q1 2021 Q2 2021 Q3 2021 Q4 2022 Q1 2022 Q2 2022 Q3 2022 Q4 2023 Q1 2023 Q2 2023 Q3 2023 Q4 2024 Q1 2024 Q2 2024 Q3 2024 Q4 Rate 4.3 4.5 4.6 4.8 4.4 4 3.7 3.7 3.5 3.2 3.0 2.8 2.9 3.0 2.9 3.1 3.9 5.3 5.7 6.6 6.4 6.4 6.2 5.8 5.6 5.4 5.2 4.9 2.5 3 3.5 4 4.5 5 5.5 6 6.5 7 7.5 - Actual - Projected 2018 2019 2020 2021 2022 2024 2023

Mortgage Credit Availability

Mortgage Credit Availability Index (MCAI)

Source: MBA

May 2023 90 100 110 120 130 140 150 160 170 180 190 Apr 2013 Jan 2014 Jan 2015 Jan 2016 Jan 2017 Jan 2018 Jan 2019 Jan 2020 Jan 2021 Jan 2022 Jan 2023

Lending Standards Still Under Control

Source: MBA

Historic Data for the Mortgage Credit Availability Index (MCAI) 0 100 200 300 400 500 600 700 800 900 June 2004 June 2005 June 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 June 2019 June 2020 June 2021 June 2022 May 2023 Housing Bubble: 868.7 96.5