U.S. Housing Markets: Looking Back, Looking · PDF fileU.S. Housing Markets: Looking Back,...
Transcript of U.S. Housing Markets: Looking Back, Looking · PDF fileU.S. Housing Markets: Looking Back,...
U.S. Housing Markets:Looking Back, Looking
Forward
Dr. Raphael Bostic
Assistant Secretary, Office of Policy Development and Research
U.S. Department of Housing and Urban DevelopmentSpecial Thanks – Ed Szymanoski, Kevin Kane, and Randall Goodnight
VCU Real Estate Trends Conference
Richmond, VA
October 12, 2010
Nonfarm PayrollsAnnual Percentage Change (12-month avg.)
-5.0
-4.0
-3.0
-2.0
-1.0
0.0
1.0
2.0
3.0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Perc
enta
ge C
hange
11.0
11.5
12.0
12.5
13.0
13.5
0
2
4
6
8
10
12
$ T
rill
ion
s
Pe
rce
nt
Year and Quarter
Trends in Unemployment Rate and Real Gross Domestic Product
Unemployment Rate (left axis) Real GDP (right axis)
Source: IHS Global Insight
Broader Market Overview Summary
• Sales market conditions remain soft in much of the country
but continue to improve in many areas
• Data on home sales prices indicate improvement
• Home sales, previously supported by the homebuyer tax
credit, have leveled off
• Inventories of new and existing homes for sale are down
from a year ago and coming closer to balance
• Rental market conditions are mixed throughout the country
• Significant declines in multifamily permits have continued
Regional Conditions 2Q 2010
Sales Markets Rental Markets
Region I (New England) Balanced Balanced
Region II (NY/NJ) Slightly Soft Balanced (NYC Tight)
Region III (Mid-Atlantic) Slightly Soft Mixed
Region IV (SE-Caribbean) Soft Soft
Region V (Midwest Soft Mixed (soft/balanced)
Region VI (Southwest) Slightly Soft Soft
Region VII (Great Plains) Balanced (Soft in MO) Soft
Region VIII (Rocky Mtns.) Soft Mixed
Region IX (Pacific) Soft Mixed
Region X (Northwest) Soft Balanced
150
170
190
210
230
250
270
$ T
ho
usa
nd
s
Commonly Cited Home Price Indices Showing Signs of StabilityTrend Lines Starting From Median Home Price of $167,000 in January 2003
S&P Case-Shiller Index
FHFA Monthly Index
Sources: Standard and Poor's Case-Shiller 20-Metro Composite Index (not seasonally adjusted), Federal Housing Finance Agency Monthly Purchase Only Index for the US (seasonally adjusted) , and National Association of Realtors: Median Price of Existing Homes S old.
0
5
10
15
20
25
30
Pe
rce
nt
of L
oan
s Se
rvic
ed
Year and Quarter
Subprime Delinquencies Rose Prior to the Recession: Percent of Total Loans Past Due By Product Type
Subprime
FHA
Prime
Source: Mortgage Bankers Association, National Delinquency Survey . Data are seasonally adjusted.
All Loans
40.0
80.0
120.0
160.0
Foreclosure Starts and Completions Remain ElevatedMonthly Foreclosure Actions (Thousands)
Source: Realty Trac.
Cumulative foreclosure completions since April 2009: 1.42 million(Includes investor, second home, and jumbo properties)
Foreclosure
Starts
Foreclosure
Completions
0
20
40
60
80
100
120
0
200
400
600
800
Existing and New Home Sales
Monthly Sales (Thousands)
Seasonally Adjusted
Source: National Association of Realtors , Census Bureau, and HUD.
Existing Home Sales (left axis)
New Home Sales (right axis)
2
3
4
5
Existing Homes on the Market Below Peak, But Number of Units Held Off the Market Has Increased
Existing Homes Available for Sale (End of Period) and Total Vacant Housing Units (Year Round) Off Market (Millions)
Sources: National Association of Realtors and Census Bureau.
Existing Homes on Market
Units Held Off Market
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
0
2
4
6
8
10
12
Mil
lio
ns
of U
nit
s
Pe
rce
nt
Year and Quarter
Quarterly Rental and Owner Vacancy Rates and Vacant Units Held Off the Market for U.S.
Note: Vacancy rates are calculated as vacant units for rent (sale) as a percent of the sum of occupied and vacant rental (owner) un its. Vacant units held off the market are not included in vacancy rate calculations. Foreclosures can affect all categories of vacancies, but a re especially affecting units held off market. Source: Commerce Department, Bureau of the Census
Rental Vacancy Rate (Left Axis)
Owner Vacancy Rate (Left Axis)
Vacant Units Held Off Market (Right Axis)
Percentage Change in SF Activity12 Months Ending 6/09 to 6/10
0.02.04.06.08.0
10.012.014.016.018.020.0
The Federal Response
• Federal Reserve purchases of GSE MBS
• Treasury backstop on GSEs
• Home Affordable Mortgage Program
• Housing Counseling
• Housing Finance Agency initiatives
• First-Time Homebuyer Tax Credit
• Low-income Housing Tax Credit program changes
• Neighborhood Stabilization program
80
90
100
110
120
130
140
150
160
170
180
190
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
Mortgage Rates Fall to Record Low and Affordability Index Remains High
Percentage Rates (left axis) and Index Values
Sources: Freddie Mac and National Association of Realtors.
30-Yr Fixed Mortgage Rate (left axis)
Housing Affordability Index (right axis)
0
1,000
2,000
3,000
4,000
5,000
6,000
7.1 Million Homeowners Have Refinanced Since April 1, 2009
Quarterly Refinance Mortgage Originations (Thousands)
Sources: Mortgage Bankers Association and HUD.
0
5
10
15
20
2009 Q4 2010 Q1 2010 Q2
Homeowners Save From Reduced Mortgage Payments
Annualized Savings from Payment Reductions ($ Billions)
All Refinances HAMP Modifications
Aggregate annual reduction in mortgage payments on refinances and loan modifications since April 1, 2009.Sources: MBA, Treasury, Freddie Mac, and HUD.
0
2
4
6
8
10
12
14
16
Home Equity Up More than $1 Trillion Since First Quarter 2009
Owners’ Equity in Household Real Estate at End of Period ($ Trillions)
Source: Federal Reserve Board.
0
1
2
3
4
Mortgage Aid Has Been Extended More Than 3 Million Times, Outpacing Foreclosures
Cumulative Mortgages Offered Aid or Foreclosed Since April 1, 2009 (Millions)
FHA Loss Mitigation HAMP Modifications
Hope Now Modifications Foreclosure Completions
Sources: HUD, Dept. of Treasury, Hope Now Alliance, and Realty Trac.
Mortgage modifications initiated since April 1, 2009: 3.35 million
0
5
10
15
20
25
30
35
FHA Supports Mortgage Lending During Crisis
FHA as Share of Quarterly Mortgage Originations by Type (Percent)
Purchase Refinance Combined
Sources: MBA and HUD..
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
2009 Q2 2009 Q3 2009 Q4 2010 Q1 2010 Q2
Housing Counselors Serve Millions of FamiliesCumulative Households Counseled Since Apr 1, 2009 (Thousands)
Source: HUD.
75
100
125
150
175
200
225
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Expectations on House Prices Have Shifted Up from 2009
S&P/Case-Shiller, House Price Futures Index (Jan 2000 = 100)
House Price Futures
Jan 2009 (dashed line)
House Price Futures
Sep 2010 (dashed line)
S&P/Case-Shiller Index,
NSA (solid line)
Sources: Standard and Poor's and Radar Logic.
Additional New Programs
• NSP III
• First Look
• FHA Short Sale program
• Hardest Hit Fund
• Emergency Homeowner Loan Program
• Rental Policies
THANK YOU
Key Web Links
Dept. of Housing and Urban Development: www.hud.gov
HUD Data and Research: www.huduser.org
Housing Scorecard: www.hud.gov/scorecard