Outlook Frank E. Nothaft, CoreLogic SVP & Chief Economist - - PowerPoint PPT Presentation

The 2017 Housing & Economic Outlook

Frank E. Nothaft, CoreLogic SVP & Chief Economist @DrFrankNothaft @CoreLogicEcon

The views, opinions, forecasts and estimates herein are those of the CoreLogic Office of the Chief Economist, are subject to change without notice and do not necessarily reflect the position of CoreLogic or its management. The Office of the Chief Economist makes every effort to provide accurate and reliable information, however, it does not guarantee accuracy , completeness, timeliness or suitability for any particular purpose. CORELOGIC and the CoreLogic logo are trademarks of CoreLogic, Inc. and/or its subsidiaries.

Household Mobility & Mortgage Market Trends

Household Trends: –Millenniums have added to housing need: renters today, owners tomorrow –Homeowners (primarily Baby Boomers) are staying in their homes longer –Interstate buyers driven by affordability, jobs, weather Mortgage Trends: –Home-price growth & lessened mobility prompts more home-improvement –High LTV & debt-to-income products are in market, but need good credit –While overall credit risk remains low, fraud risk increases

Large Demographic Tailwind Has Arrived

Largest Age Cohort

Source: U.S. Census Bureau, Population as of July 1, 2015

3.4 3.6 3.8 4 4.2 4.4 4.6 4.8 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33

Age in 2015

34 35 36 37 38 39 40

Average Age First-time Homebuyer Average Age Repeat Buyer Population in 2015 (Millions)

16% 12% 8% 4% 20%

Millennial Share of Buyers Lower in Expensive Markets

Share of Purchase-Money Applicants Aged Under 30

Source: CoreLogic (purchase loan applications, Jan-Oct 2016)

Americans Are Keeping Their Homes Longer

8 6 4 2 10 12 Number of Years A Home Is Owned (Median) 14 1985 1990 1995 2000 2005

Source: American Housing Survey for the United States, various years (difference between survey year and median year owner-occupant moved into unit), CoreLogic public records for United States (length of time between recorded sales on same home).

2010 2015

Home Sellers Owner Occupants

Interstate Buyers Seek Affordability, Jobs and Warmth

Jan-Oct 2016)

Ratio of Buyers Moving Out to Moving In Ratio of Buyers Moving In to Moving Out

All Ages

NY , NJ NC, FL CA, CO VA, FL CA, CO CA, FL CA, TX CA, OR NY , PA FL, KY VA, FL NJ, FL MD, FL FL, IN TX, NV NJ, FL

Source: CoreLogic (purchase loan applications,

States in Green are Top 2 Sources States in Red are Top 2 Destinations

1 1 2 2 3 3 4 4

Millennials: Affordability & Jobs Baby Boomers: Affordability & Warmth

Source: CoreLogic (purchase loan

Ages 25-34 Ages 55 and Older

applications, Jan-Oct 2016)

NY NC VA CA AZ CA OR NY KY VA NJ NY NC CA FL CA FL NY GA MD IN TX NJ AZ FL FL FL NJ FL FL AZ FL

State in Green is Top Source State in Red is Top Destination

New-Home Sales Levels Highest in the South

Monthly Number of New Sales (Average) New Home Sale Share Based on the Top 100 Metros for Home Sales

500 1,000 1,500 2,000 Houston TX Dallas TX Atlanta GA Phoenix AZ Austin TX Charlotte NC Washington DC San Antonio TX Orlando FL Tampa FL Denver CO Nashville TN Riverside CA New York NY Raleigh NC Las Vegas NV Jacksonville FL 0% 5% 10% 15% 20%

Source: CoreLogic. Left: average monthly new homes sold Oct 2015 to Sept 2016; Right: new-home share of sales Oct 2015 to Sept 2016; top 100 CBSAs based on new and existing home sales.

25% Raleigh NC Austin TX Charleston SC San Antonio TX Provo UT Houston TX Columbia SC Dallas TX Charlotte NC Jacksonville FL Naples FL Lakeland FL Baton Rouge LA Boise ID Nashville TN Orlando FL Las Vegas NV

Highest Growth New-Home Markets (top 100 metros)

Source: CoreLogic, percent change, number of new-home sales Oct 2015-to-Sept

Highest Growth New-Home Metros

0% 5% 10% 15% 20% 25% 30%

Tucson AZ

2016 vs. Oct 2014-to-Sept 2015, based on 100 largest metros for new home sales.

Boise ID Port St. Lucie FL Sacramento CA Daphne AL Anaheim CA Salt Lake City UT Colorado Springs CO Phoenix AZ Knoxville TN Des Moines IA San Diego CA Dallas TX Atlanta GA Portland OR Greeley CO Pensacola FL Tampa FL Deltona FL Nashville TN

Metros with:

• good affordability

,

• good job growth,
• good weather

have had the highest growth in new-home sales over the last year

100 2000 2002 2004 2006 2008 2010

Source: CoreLogic Home Price Index (December 6, 2016 release)

140 120 160 200 5% 180 220 2012 2014 2016 2018 43% CoreLogic Home Price Index (January 2000 = 100)

• Forecast -

U.S. Home Prices: Price to Moderate to 4.7% in 2017

HELOC Volume Up in 2016

Approved HELOCs (Billions of Dollars)

$400 $350 $300 $250 $200 $150 $100 $50 $0 2000 2004 2008 2012 2016

(Through September, Annualized) Source: CoreLogic public records, second-lien HELOCs placed more than 60 days after first lien.

2016 Loans Have Less Credit Risk Than Pre-2009 Loans

CoreLogic Housing Credit Index (2001 = 100)

36

2001 2003 2006 20 40 60 80 100 120 140 2008 2011 2013 2016

More Risk Less Risk 2001-2003 Benchmark

Source: CoreLogic Housing Credit Index (through 2016Q3)

2001-03 mean +1 s.d.

Credit Score Less Than 640 L TV Share 95 And Above DTI Share 43 And Above Non-Owner Occupancy Share Condo Co-op Share Low & No Doc Share 75 50 25 100 125 150

Benchmark (2001 and 2002 Originations) Current (2016:Q3)

Mortgage Credit Risk Along Six Dimensions

First-Lien Home Purchase Originations

37

Source: CoreLogic Housing Credit Index

Beginning 2009, Excellent Loan Performance

38

Serious Delinquency Rate by Origination Cohort 1999-2003 2004-2008 2009-2014

Source: CoreLogic: March 2016