KCM and DPR Realty December 2022 National and Local AZ Housing Market Update, Shambreskis & Howard by ShambreskisAndHoward

December 2022

DPR Realty

What’s Happening with Mortgage Rates?

normal

- Lawrence Yun, Chief Economist, NAR

30-year

A return to a

spread between the government borrowing rate and the home purchase borrowing rate will bring the

mortgage rates down to around 6%.

For Almost 50 Years, the 30-Year Mortgage Rate Has Moved in Unison with the 10-Year Treasury Yield 0 2 4 6 8 10 12 14 16 18 1972 1980 1990 2000 2010 2021 10-Year Treasury Yield 30-Year Fixed Mortgage Rate Average Spread: 1.7

Source: Freddie Mac, Macrotrends

10-Year Treasury Yield

1.5 2 2.5 3 3.5 4 4.5

3.48% June 14 2.57% Aug 1 1

4.25% Oct 24

3.95% Sept 27 Dec 2021 Jan 2022 Feb 2022 Mar 2022 Apr 2022 May 2022 June 2022 July 2022 Aug 2022 Sept 2022 Oct 2022 Nov 2022 Dec 2022

3.51% Dec 1

Source: WSJ

2.04% Feb 15

3.13% May 11

Sources: Freddie Mac and CNBC Why Are Mortgage Rates Not 5.5%? The Increase in the Spread Above the 10-Year Yield Is Now Dramatic 3.49 3.5 3.7 1.79 2.99 1.79 2000-2021 Today Today if Normal Spread Spread (Difference Between the Mortgage Rate and the 10-Year Yield) 10-Year Treasury Yield 5.28% Mortgage Rate 6.49% Mortgage Rate 5.49% Mortgage Rate

- Ali Wolf, Chief Economist, Zonda

The housing market is expected to face continued uncertainty heading into 2023 as consumers, financial markets, and policymakers work through their respective challenges in today’s economy.

Because we see a slowdown, and we see the inflation comparisons start to become more and more favorable, you’ll start to see that inflation number move lower, lower, lower, lower. And as a result, mortgage rates should move similarly on a downward trajectory—probably giving us around 5%, below 5% within the next six months.

- Barry Habib, MBS Highway

Don’t Trust the Headlines Without the Proper Context

Source: Black Knight

Amount of equity available for homeowners to access before hitting a maximum 80% combined LTV in trillions still $400M above last year $4.9T $9.9T $10.3T 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Q1 2022 Q2 2022 Q3

Drop in Tappable Equity Put in Perspective

Homeowners have very high levels of tappable home equity today, providing a cushion to withstand potential price declines, but also preventing housing distress from turning into a foreclosure. . . . the result will likely be more of a foreclosure ‘trickle’ than a ‘tsunami.’

- Ksenia Potapov, Economist, First American, 11/15/2022

Source: NY Fed

Card

Average American Credit Card Balance

$3,283 2700 2900 3100 3300 3500 2019:Q3 Q4 2020:Q1 Q2 Q3 Q4 2021:Q1 Q2 Q3 Q4 2022:Q1 Q2 Q3

Credit

Balances Near 2019 Levels

$3,242 $3,391

Though delinquency rates are rising they remain low by historical standards and suggest consumers are managing their finances through the period of increasing prices.

Liberty Street Economics Blog, 11/15/2022

Source: The Fed

Debt-To-Income Ratio

Historic Lows Total quarterly required mortgage payments divided by total quarterly disposable personal income. Household Debt Service Ratio for Mortgages as a Percentage of Disposable Personal Income 1991 1Q 6.22% 1980 1Q 4.38% 1980 TODAY 2007 4Q 7.21% TODAY 3.9% Housing Bubble 1998 4Q 5.46%

Mortgage

near

For the second quarter in a row, the mortgage delinquency rate fell to its lowest level since MBA’s survey began in 1979 –declining to 3.45%. Foreclosure starts and loans in the process of foreclosure also dropped in the third quarter to levels further below their historical averages.

- Marina Walsh, VP of Industry Analysis, MBA, 11/2022

Source: NY Fed

Record

Number of Consumers with New Foreclosures 745K 2M 278K 88K 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Q1-3

Foreclosures Up, but near

Lows

2023 Housing Market Forecast

I’d say if you are a homebuyer, somebody or a young person looking to buy a home, you need a bit of a reset. We need to get back to a place where supply and demand are back together and where inflation is down low again, and mortgage rates are low again.

- Jerome Powell, Chair, Federal Reserve (Quoted in June of 2022)

Source: Freddie Mac Freddie Mac 30-Year Fixed Rate: January 2022–Today 3.22 3.45 3.56 3.55 3.55 3.69 3.92 3.89 3.76 3.85 4.16 4.42 4.67 4.72 5.00 5.11 5.10 5.27 5.30 5.25 5.10 5.09 5.23 5.78 5.81 5.70 5.30 5.51 5.54 5.30 4.99 5.22 5.13 5.55 5.66 5.89 6.02 6.29 6.7 6.66 6.92 6.94 7.08 6.95 7.08 6.61 6.58 1/6 2/3 3/3 3/31 4/28 5/26 6/23 7/21 8/18 9/15 10/13 11/10 6.49 12/01 2022 Defined by Rising Mortgage Rates

Mortgage Rate Projections November 2022 Quarter Freddie Mac Fannie Mae MBA NAR Average of All Four 2023 Q1 6.60% 7.00% 6.20% 6.50% 6.58% 2023 Q2 6.50% 6.90% 5.60% 6.40% 6.35% 2023 Q3 6.40% 6.70% 5.40% 6.30% 6.20% 2023 Q4 6.20% 6.50% 5.20% 6.10% 6.00%

- Greg McBride, Chief Financial Analyst, Bankrate

.

. mortgage rates could pull back meaningfully next year if inflation pressures ease.

Source: Census, NAR Total Home Sales 1999 – October 2022 6,065,000 6,050,000 6,242,000 6,603,000 7,264,000 7,981,000 8,359,000 7,530,000 5,798,000 4,609,000 4,708,000 4,504,000 4,568,000 5,025,000 5,516,000 5,374,000 5,755,000 6,013,000 6,124,000 5,960,000 6,026,000 6,465,000 6,891,000 5,800,000 5,100,000 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2022 Forecast 2023 Forecast

Total Home Sales Forecasts In Millions 5.1 4.4 5.1 5.3 5.4

NAR

2023

Average Fannie Mae Freddie Mac MBA

- Lawrence Yun, Chief Economist, NAR

The upcoming months should see a return of buyers, as mortgage rates appear to have already peaked and have been coming down since mid-November.

Price Forecasts for 2023 0.4% 5.4% 2.6% 1.2% 0.7% -0.2% -1.5% -5.1% -6.0% -4.0% -2.0% 0.0% 2.0% 4.0% 6.0% Average of All 7 Forecasts Realtor.com HPES NAR MBA Zelman Latest Forecasts from Each Entity Fannie Mae Freddie Mac

Home

- Mark Fleming, Chief Economist, First American

The housing market, once adjusted to the new normal of higher mortgage rates, will benefit from continued strong demographicdriven demand relative to an overall, long-run shortage of supply.

From our perspective, the good news is that demographics remain favorable for housing, so the sector appears well-positioned to help lead the economy out of what we expect will be a brief recession.

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

Now Available: Winter Buyer & Seller Guides

https://www.nar.realtor/newsroom/home-prices-rose-yearover-year-in-98-of-metro-areas-in-third-quarter-of-2022

https://www.freddiemac.com/pmms/pmms_archives https://www.macrotrends.net/2016/10-year-treasury-bondrate-yield-chart

https://www.wsj.com/marketdata/quotes/bond/BX/TMUBMUSD10Y/historical-prices

https://www.cnbc.com/quotes/US10Y https://www.freddiemac.com/home

https://www.builderonline.com/data-analysis/a-look-at-therelationship-between-the-10-year-treasury-and-30-yearmortgage-rate_o

https://www.mauldineconomics.com/download/globalmacro-update-transcript-barry-habib

https://twitter.com/DianaOlick/status/158969534930816614

https://www.blackknightinc.com/wpcontent/uploads/2022/11/BKI_MM_Sept2022_Report.pdf

Resources Slide(s) Description Link(s) 3 Yun Quote, Rates

4 Rates & 10-Year Treasury Over Time Graph

5 10-Year Treasury Graph

6 Current Rates & 10-Year Treasury Graph

7 Wolf Quote

8 Habib Quote

10 Olick Tweet

5 11 Tappable Equity Graph

https://blog.firstam.com/economics/will-foreclosures-rise-asthe-housing-and-labor-markets-cool

https://www.cnbc.com/2022/11/15/household-debt-soars-atfastest-pace-in-15-years-as-credit-card-use-surges-fedreport-says.html

https://libertystreeteconomics.newyorkfed.org/2022/11/bala nces-are-on-the-rise-so-who-is-taking-on-more-credit-carddebt/

https://www.federalreserve.gov/releases/housedebt/default. htm

Resources Slide(s) Description Link(s) 12 Potapov Quote

13 CNBC Headline

14 Credit Card Balances Graph

15 Liberty Street Economics Quote

16 Mortgage Debt-To-Income Graph

https://www.newyorkfed.org/microeconomics/hhdc

https://fortune.com/2022/06/16/housing-market-resetfederal-reserve-could-see-home-prices-fall/

https://freddiemac.gcs-web.com/node/26346/pdf http://www.freddiemac.com/pmms/

https://www.fanniemae.com/media/45306/display https://cdn.nar.realtor/sites/default/files/documents/forecastq4-2022-us-economic-outlook-09-28-2022.pdf https://www.freddiemac.com/research/forecast/20221021quarterly-forecast-rapidly-rising-rates-declining-demanddriving-housing-market https://www.mba.org/docs/default-source/research-andforecasts/forecasts/mortgage-finance-forecast-nov-2022.pdf

https://www.bankrate.com/real-estate/housing-marketpredictions-2023/#home-values

Resources Slide(s) Description

18 Foreclosures

Link(s)

Graph

20 Powel

Quote

21 Mortgage

Rates Graph

22 Mortgage

Rates Forecast

McBride Quote

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

https://cdn.nar.realtor/sites/default/files/documents/ehs-102022-overview-2022-11-18.pdf

https://www.census.gov/construction/nrs/pdf/newressales.p df

https://cdn.nar.realtor/sites/default/files/documents/forecastq4-2022-us-economic-outlook-09-28-2022.pdf

https://www.fanniemae.com/media/45306/display https://cdn.nar.realtor/sites/default/files/documents/forecastq4-2022-us-economic-outlook-09-28-2022.pdf

https://www.freddiemac.com/research/forecast/20221021quarterly-forecast-rapidly-rising-rates-declining-demanddriving-housing-market

https://www.mba.org/docs/default-source/research-andforecasts/forecasts/mortgage-finance-forecast-nov-2022.pdf

Resources

Description

Slide(s)

Link(s)

Home Sales Since 1999 Graph

25 Home Sales Forecasts

26 Yun Quote, Rates Forecast https://twitter.com/NAR_Research/status/15979709682987 82720?s=20&t=RM8XMxPm_1ZkD0xfSe4N6Q

https://news.move.com/2022-11-30-Realtor-com-RHousing-Forecast-Homebuying-Costs-Arent-Coming-Downin-2023

https://www.fanniemae.com/media/44911/display

https://cdn.nar.realtor/sites/default/files/documents/forecastq4-2022-us-economic-outlook-09-28-2022.pdf

https://pulsenomics.com/surveys/#home-price-expectations

https://www.zelmanassociates.com/ (by subscription)

https://www.mba.org/docs/default-source/research-andforecasts/forecasts/mortgage-finance-forecast-oct2022.pdf?sfvrsn=d32917_1

https://blog.firstam.com/economics/why-the-housingmarket-may-begin-to-stabilize-in-2023

https://www.fanniemae.com/newsroom/fannie-maenews/economy-still-expected-enter-and-exit-modestrecession-2023

Resources Slide(s) Description Link(s)

Home Price Forecasts Graph

28 Fleming Quote

29 Duncan Quote

Updates

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

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

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) 40 Confidence Index

41-43, 51, 53, 54, 60-65 Existing Home Sales

44-47 New Home Sales

48 Total Home Sales

49, 50 Pending Home Sales

55-57 Case Shiller

58 CoreLogic Price Forecast

Link(s)

https://www.nar.realtor/topics/existing-home-sales http://www.census.gov/construction/nrs/pdf/newressales.pdf https://www.realtor.com/research/data/

https://www.showingtime.com/blog/october-2022-showingindex-results/

http://www.freddiemac.com/pmms/pmms_archives.html http://www.freddiemac.com/research/forecast/

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

60-67 Inventory

69 Showing Activity

71, 72, 74, 75 Mortgage Rates

73 Mortgage Rate

Projections

77, 78 Mortgage Credit Availability

Home Sales

42 30 26 26 26 27 31 32 33 42 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 21 Mar-22 Apr May June July Aug Sept Oct Nov Dec 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 Source: NAR Average Days

the Market October

2022

Existing Home Sales

January 2014

6,800,000

6,300,000

5,800,000

4,800,000

4,300,000

5,300,000 Jan 2014 Jan 2015 Jan 2016 Jan 2017 Jan 2018 Jan 2019 Jan 2020 Jan 2021 Jan 2022

Source: NAR

Since

3,800,000

Source: NAR

Home Sales Year-Over-Year, by Region -28.4% -23.0% -25.5% -27.2% -37.5% U.S. Northeast Midwest South West

Existing

Source: NAR

Home Sales In Thousands 0 100 200 300 400 500 600 January February March April May June July August September October November December 2020 2021 2022

Existing

Source: Census New Home Sales In Thousands 0 10 20 30 40 50 60 70 80 90 January February March April May June July August September October November December 2020 2021 2022

Source: Census

Home Sales 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

New

0% 5% 9% 10% 16% 7% Under $150K $150-$199K $200-299K $300-$399K $400-$499K $500-$749K Over $750K Source: Census New Home Sales Percent of Distribution by Price Range * Less Than 500 Units or Less Than 0.5 Percent * 1%

Source: Census

Homes Selling Fast

Months from Completion to Sold 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 1.8 1.5 1.6

New

Median

Source: Census Total Home Sales In Thousands 443 436 567 587 593 676 646 631 604 577 557 574 422 423 524 517 557 575 495 528 477 419 January February March April May June July August September October November December 2021 2022

Source: NAR

Sales 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 100 = Historically Healthy Level

Pending Home

Source: NAR

Home Sales Year-Over-Year by Region 100 = Historically Healthy Level -37.0% -29.5% -32.1% -38.2% -46.2% U.S. Northeast Midwest South West

Pending

Percentage of Distressed Property Sales

Source: NAR

0% 5% 10% 15%

35% Jan 2012 Jan 2013 Jan 2014 Jan 2015 Jan 2016 Jan 2017 Jan 2018 Jan 2019 Jan 2020 Jan 2021 Jan 2022 4%

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

20% 25% 30%

Home Prices

6.6% 8.0% 5.9% 8.0% 5.3% U.S. Northeast Midwest South West Source: NAR Sales Price of Existing Homes Year-Over-Year, by Region

Source: NAR

Change

Sales Year-Over-Year, by Price Range $0-100K $100-250K $250-500K $500-750K $750K-1M $1M+ % -26.1% -35.2% -26.6% -21.4% -25.1% -31.1% -26.1% -35.2% -26.6% -21.4% -25.1% -31.1%

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

Change in

Year-Over-Year, 20 City Composite

Source: S&P Case-Shiller 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

Home

Prices

Source: S&P Case-Shiller Change in Home Prices Year-Over-Year, 20 City Composite 18.5% 18.3% 18.6% 18.9% 20.3% 21.1% 21.2% 20.5% 18.7% 16.0% 13.1% 10.4% Oct Nov Dec Jan 2022 Feb Mar Apr May June July Aug Sept

Year-Over-Year % Change in Price October 2022

Source: CoreLogic

10.1% 4.1% Current Forecast

Housing Inventory

Change in Inventory

Month-Over-Month, November 2022

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

Source: NAR

Inventory

Homes

Sale Since 2019 3.8 3.6 3.8 4.2 4.34.3 4.2 4.04.0 3.9 3.7 3.0 3.13.1 3.3 4.0 4.6 3.9 3.1 3.0 2.7 2.5 2.3 1.91.9 2.0 2.1 2.3 2.52.5 2.62.6 2.42.4 2.1 1.7 1.6 1.7 1.9 2.2 2.6 2.9 3.23.2 3.1 3.3 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

Months

for

Source: NAR

Sale Last 12 Months 2.1 1.7 1.6 1.7 1.9 2.2 2.6 2.9 3.2 3.2 3.1 3.3 0 1 2 3 4 5 6 Nov Dec 22-Jan Feb Mar Apr May June July Aug Sept Oct

Months Inventory of Homes for

Source: NAR

Inventory Levels -30% -25% -20% -15% -10% -5% 0% 5% 10% January 2014 January 2015 January 2016 January 2017 January 2018 January 2019 January 2020 January 2021 January 2022 % 7. 5. 3. 6. 6. 5. 5. 4. 6. 5. 5. -0 -0 -0 2. -0 1. 0. -4 -1 -3 -4 -1 -3 -2 -1 -1 -3 -9 -5 -5 -1 -6 -1 -9 -6 -7 -6 -6 -9 -8 -7 -9 -6 -6 -1 -9 -1 -9 -8 -7 -6 -6 0. 0. 2. 1. 2. 4. 6. 4. 2. 2. 1. 2. 0. -1 -2 -2 -4 -5 -9 -1 -9 -1 -1 -1 -1 -2 -1 -1 -1 -2 -2 -2 -2 -2 -2 -2 -1 -1 -1 -1 -9 -1 -1 -1 -1 -9 -1 -4 2. 0. 0. -0 -0

Year-Over-Year

Year-Over-Year Inventory Levels

Source: NAR

Last 12 Months -12.8% -9.8% -13.3% -18.0% -17.9% -15.5% -9.5% -10.4% -4.1% 2.4% 0.0% 0.0% -0.8% -0.8% Sept Oct Nov Dec Jan 2022 Feb Mar Apr May June July August July Aug Sept June Oct

Source: Census New Home Monthly Inventory Seasonally Adjusted, Last 12 Months 6.2 5.6 5.7 6.0 7.0 8.4 8.3 9.4 10.1 8.3 9.4 8.9 Nov Dec Jan 22 Feb Mar Apr May June Jul Aug Sept Oct

Source: Census New Home Monthly Inventory Non-Seasonally Adjusted 3.9 4.4 3.7 4.3 5.0 5.8 5.9 6.9 6.5 7.6 7.3 6.4 5.7 6 7 8.4 8.3 9.4 10.1 8.3 9.4 8.9 Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec 2021 2022

Buyer Demand

Source: ShowingTime

Showing Traffic

Home

Continues Decline Amid Challenging Market

fewer new listings hitting the market in October and buyers who continue to struggle with affordability challenges, it seems both sides are sitting out this market

-27.3% -22.4% -23.0% -34.0% -50.3% U.S. Northeast Midwest South West

Year-Over-Year Increase in Showing Activity, October 2022 Michael Lane, Vice President & General Manager, Showing Time “With

cooldown.”

Mortgage Rates

2.0 2.5 3.0 3.5 4.0 4.5

6.5 7.0 7.5 8.0 Source: Freddie Mac

30-Year

5.0 5.5 6.0

Mortgage Rates

Fixed Rate, January 2018–Today 6.49%

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 1/7/16 2/4 3/3 4/7 5/5 6/2 7/7 8/4 9/1 10/6 11/3 12/1 1/5/2017 2/2 3/2 3/30 4/27 5/25 6/22 7/20 8/17 9/14 10/12 11/9 12/7 1/4/2018 2/1 3/1 4/5 5/4 6/7 7/5 8/2 9/6 10/4 11/1 12/6 1/3/2019 1/31 3/7 4/4 5/2 6/6 7/3 8/1 9/5 10/3 11/7 12/5 1/2/2020 2/6 3/5 4/2 5/7 6/4 7/2 8/6 9/3 10/1 11/5 12/3 1/7/2021 2/4 3/4 4/1 5/6 6/3 7/1 8/5 9/2 10/7 11/4 12/2 1/6/2022 2/3 3/3 4/7 5/5 6/2 7/7 8/4 9/1 10/6 11/3 12/1 Source: Freddie Mac Mortgage Rates 30-Year Fixed Rate, January 2016–Today 6.49%

2.0 3.0 4.0 5.0 6.0 7.0 8.0 2018 2/1 3/1 4/5 5/3 6/7 7/5 8/2 9/6 10/4 11/1 12/6 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 6.6 6.5 6.4 6.2 2023 Q1 2023 Q2 2023 Q3 2023 Q4 Source: Freddie Mac Mortgage Rates 30-Year Fixed Rate January 2018 – Today Actual Interest Rates Where Are They Going?

Mortgage Rates

Source: Freddie Mac

Actual

Projected

2023

30-Year Fixed Rate 2016 Q1 2016 Q2 2016 Q3 2016 Q4 2017 Q1 2017 Q2 2017 Q3 2017 Q4 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 Rate 3.7 3.6 3.5 3.8 4.2 4.0 3.9 3.9 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 3.8 5.3 5.6 6.8 6.6 6.5 6.4 6.2 2.5 3 3.5 4 4.5 5 5.5 6 6.5 7 7.5 -

2016 2017 2018 2019 2020 2021

2022

Mortgage Credit Availability

Mortgage Credit Availability Index (MCAI)

Source: MBA

October 2022 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

Lending Standards Still Under Control

Data for the Mortgage Credit Availability Index (MCAI)

Source: MBA

Historic

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 Oct 2022 Housing Bubble: 868.7 102

Housing Market Statistics for Northeast Valley

Single Family Homes in Carefree, Cave Creek, Fort McDowell, Fountain

Paradise Valley, Rio Verde and Scottsdale, Arizona

Hills,

Average Price per Sq Ft for Sold Northeast Valley Single Family Homes

Average Days on Market

for Sold Northeast

Single Family Homes

Valley

Number of Active Listings for Northeast Valley Single Family Homes

Average Price per Sq Ft for Active Northeast Valley Listings

Peter Shambreskis, REALTOR®, ABR, CRS, GRI, SFR 480-229-6468 Corinne Howard, REALTOR®, ePRO, GRI, SFR, SRS 480-229-6467 info@ShambreskisAndHoward.com www.ShowScottsdaleHomes.com CONTACT US TO DISCUSS YOUR LOCAL ARIZONA REAL ESTATE MARKET