SLIDE 1
1
Presented by
Lynn Fisher
Mortgage Bankers Association
2
Summary of the MBA Outlook
Source: MBA Forecast – May 2017 2
MBA Economic and Mortgage Finance Outlook MBA of Alabama Annual - - PowerPoint PPT Presentation
MBA Economic and Mortgage Finance Outlook MBA of Alabama Annual - - PowerPoint PPT Presentation
MBA Economic and Mortgage Finance Outlook MBA of Alabama Annual Conference June 7, 2017 Presented by Lynn Fisher Mortgage Bankers Association 1 Summary of the MBA Outlook 2016 2017 2018 2019 GDP Growth 2.0% 2.1% 1.9% 1.7% Inflation
SLIDE 2
SLIDE 3
3
Job Growth Starting Off Strong in 2017
Source: BLS 3 235 284 254 265 163 (144) (42) 10 170 210 174 96 (297) (422) 88 174 179 192 250 226 187 216 232 50 174 138 (500) (400) (300) (200) (100)
- 100
200 300 400 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 - Jan 2017 - Feb 2017 - Mar 2017 - Apr 2018 - Mar Thousands of jobs
Average Monthly Payroll Growth
SLIDE 4
4
Alabama’s Unemployment Rate Remains Above US
Source: BLS
5.4 4.4 2 4 6 8 10 12 1996 - Jan 1996 - Jun 1996 - Nov 1997 - Apr 1997 - Sep 1998 - Feb 1998 - Jul 1998 - Dec 1999 - May 1999 - Oct 2000 - Mar 2000 - Aug 2001 - Jan 2001 - Jun 2001 - Nov 2002 - Apr 2002 - Sep 2003 - Feb 2003 - Jul 2003 - Dec 2004 - May 2004 - Oct 2005 - Mar 2005 - Aug 2006 - Jan 2006 - Jun 2006 - Nov 2007 - Apr 2007 - Sep 2008 - Feb 2008 - Jul 2008 - Dec 2009 - May 2009 - Oct 2010 - Mar 2010 - Aug 2011 - Jan 2011 - Jun 2011 - Nov 2012 - Apr 2012 - Sep 2013 - Feb 2013 - Jul 2013 - Dec 2014 - May 2014 - Oct 2015 - Mar 2015 - Aug 2016 - Jan 2016 - Jun 2016 - Nov 2017 - Apr
US and AL Unemployment Rates (%)
AL US
SLIDE 5
5
Steady Increase in Recent Wage Growth
5 Source: Federal Reserve Bank of Atlanta 3.5 3.9
0.0 1.0 2.0 3.0 4.0 5.0 6.0
Atlanta Fed Wage Growth Tracker
Overall Prime-age
Percent
SLIDE 6
6
Source: BLS
Inflation Near 2 Percent Threshold
6
2.2 1.9
(40.0) (30.0) (20.0) (10.0)
- 10.0
20.0 30.0 40.0 (4.0) (3.0) (2.0) (1.0)
- 1.0
2.0 3.0 4.0 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17
CPI and Selected Components
Year over year percent change
Motor Fuel (right axis) All Items (left axis) All Items exc Food & Energy (left axis)
SLIDE 7
7
Changes to Fed’s Balance Sheet Are Coming…
Source: Federal Reserve, Wall Street Journal
SLIDE 8
8
Rates Expected to Increase
Source: Federal Reserve, Freddie Mac, MBA 8
SLIDE 9
9
Refinance Activity Has Declined Sharply
Source: MBA Weekly Applications Survey 9
0.00 1.00 2.00 3.00 4.00 5.00 6.00 0.0 1000.0 2000.0 3000.0 4000.0 5000.0 6000.0 Rate Index
Refinance Index and 30 Yr Fixed Mortgage Rate
Refi Index (left axis) 30 Yr Fixed rate (right axis) 30 yr Fixed Rate Refinance Index
SLIDE 10
10
IMB Volume, Profits Down in Q1
Source: MBA’s Quarterly Mortgage Bankers Performance Report, www.mba.org/performancereport
SLIDE 11
11
The Millennial Progression
Source: Census 2014 National Population Projections 11
24.0 24.7 25.1
19 20 21 22 23 24 25 26 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 Millions
Population Projections by 5-Year Age Group
26-30 31-35 36-40
SLIDE 12
12
Growth in Owner-Occupier Households Picking Up
Source: Census
60% 61% 62% 63% 64% 65% 66% 67% 68% 69% 70%
- 1,000
- 500
500 1,000 1,500 2,000 2,500 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17Q1
Chart of the Week - June 2, 2017
Annual Change in Owner-Occupied and Renter Households
Homeowner (thous.) Renter (thous.) Homeownership Rate (%)
SLIDE 13
13
Low Inventories of Existing Homes for Sale
Source: NAR
4.03
- 1,000
2,000 3,000 4,000 5,000 6,000 7,000 8,000
- 2
4 6 8 10 12 Jan 1999 Jun 1999 Nov 1999 Apr 2000 Sep 2000 Feb 2001 Jul 2001 Dec 2001 May 2002 Oct 2002 Mar 2003 Aug 2003 Jan 2004 Jun 2004 Nov 2004 Apr 2005 Sep 2005 Feb 2006 Jul 2006 Dec 2006 May 2007 Oct 2007 Mar 2008 Aug 2008 Jan 2009 Jun 2009 Nov 2009 Apr 2010 Sep 2010 Feb 2011 Jul 2011 Dec 2011 May 2012 Oct 2012 Mar 2013 Aug 2013 Jan 2014 Jun 2014 Nov 2014 Apr 2015 Sep 2015 Feb 2016 Jul 2016 Dec 2016
Existing Home Sales, Inventory and Months Supply
Months supply of existing homes on market (Months, SA) Existing Home Sales (Ths., SAAR) Number of homes available for sale (Ths., SA)
Months Ths.
SLIDE 14
14
Continued Strong House Price Growth
Source: FHFA 14
100.00 120.00 140.00 160.00 180.00 200.00 220.00 240.00 Q1-91 Q4-91 Q3-92 Q2-93 Q1-94 Q4-94 Q3-95 Q2-96 Q1-97 Q4-97 Q3-98 Q2-99 Q1-00 Q4-00 Q3-01 Q2-02 Q1-03 Q4-03 Q3-04 Q2-05 Q1-06 Q4-06 Q3-07 Q2-08 Q1-09 Q4-09 Q3-10 Q2-11 Q1-12 Q4-12 Q3-13 Q2-14 Q1-15 Q4-15 Q3-16
FHFA Expanded HPI
(quarterly, SA, 1991Q1 = 100)
US Alabama
SLIDE 15
15
Single Family Starts Still Recovering
Source: Census 15
835 337
200 400 600 800 1000 1200 1400 1600 1800 2000
Single and Multi Family Housing Starts
SAAR, 000s of units
Housing Starts: 1 Unit (SAAR, Thous.Units) Housing Starts: Total Multifamily (SAAR, Thous.Units)
SLIDE 16
16
The Supply of Non-Jumbo Mortgage Credit
16
50 60 70 80 90 100 110 Source: Mortgage Bankers Association; Powered by AllRegs Market Clarity
Conforming Index
(NSA, 3/2012=73.5)
100 150 200 250 300 350 400 450 500 Source: Mortgage Bankers Association; Powered by AllRegs Market Clarity
Government Index
(NSA, 3/2012=183.5)
SLIDE 17
17
Purchase Apps Running Slightly Ahead of 2016
Source: MBA Weekly Applications Survey
17
50 100 150 200 250 300 350 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 Week of the Year
Purchase Mortgage Applications Index
(by week of the year, NSA)
2015 2016 2017
SLIDE 18
18
Purchase Applications Increasing in AL
Source: MBA Weekly Applications Survey
50 70 90 110 130 150 170 190 210 230 250 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 Week of Year
Purchase Mortgage Applications Index - AL
(by week of the year, NSA)
2015 2016 2017
SLIDE 19
19
Government Share of Purchase Mortgage Applications and Average Loan Size
Source: MBA Weekly Applications Survey 50 100 150 200 250 300 5 10 15 20 25 17-Jan-14 14-Mar-14 09-May-14 04-Jul-14 29-Aug-14 24-Oct-14 19-Dec-14 13-Feb-15 10-Apr-15 05-Jun-15 31-Jul-15 25-Sep-15 20-Nov-15 15-Jan-16 11-Mar-16 06-May-16 01-Jul-16 26-Aug-16 21-Oct-16 16-Dec-16 10-Feb-17 Apr 7 2017
FHA Purchase Share and Avg Loan Size
Average Loan Size (Thous. $, right axis) Share of Purchase Loan Applications (%, left axis)
50 100 150 200 250 300 5 10 15 20 25 17-Jan-14 14-Mar-14 09-May-14 04-Jul-14 29-Aug-14 24-Oct-14 19-Dec-14 13-Feb-15 10-Apr-15 05-Jun-15 31-Jul-15 25-Sep-15 20-Nov-15 15-Jan-16 11-Mar-16 06-May-16 01-Jul-16 26-Aug-16 21-Oct-16 16-Dec-16 10-Feb-17
VA Purchase Share and Avg Loan Size
Average Loan Size (Thous. $, right axis) Share of Purchase Loan Applications (%, left axis)
SLIDE 20
20
Declining Credit Scores as FHA Returns to Mission
Source: HUD
697 700 692 698 701 701 695 703 706 691 688 693 681 672 672 681 676 675 680 677 673 650 660 670 680 690 700 710 Home Purchase Conventional to FHA Refi FHA to FHA Refi
Chart of the Week – February 10, 2017
FHA Average Credit Scores on New Endorsements
Fully underwritten only, excludes streamlines
2010 2011 2012 2013 2014 2015 2016
20
SLIDE 21
21
ARM Share of Applications Increasing
Source: MBA Weekly Applications Survey
0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0%
ARM Loans as Share of All Applications
NSA, based on loan count
1 Yr ARM 3/1 ARM 5/1 ARM 7/1 ARM 10/1 ARM Other ARM
SLIDE 22
22
MBA Originations Forecast
Source: MBA Forecast – May 2017
990 1,081 1,178 1,245 901 515 410 395
$0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Billions of dollars in originations
Mortgage Originations: 1999-2019
Purchase Refi
SLIDE 23
23
Contact Information & MBA Resources
Lynn Fisher, Ph.D. Vice President & Executive Director of RIHA | Research and Economics 202-557-2739 lfisher@mba.org
MBA Research: www.mba.org/research RIHA: www.housingamerica.org
23