Were in a mental recession Its a constant stream of negative - - PowerPoint PPT Presentation

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Dec 18, 2022 167 likes •395 views

Were in a mental recession Its a constant stream of negative headlines for a couple of months it wears on you. Sam Khater Chief Economist at Freddie Mac What will actually happen to home values (prices) in 2019? Case

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“We’re in a mental recession… It’s a constant stream of negative headlines for a couple of months… it wears on you.”

Sam Khater

Chief Economist at Freddie Mac

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What will actually happen to home values (prices) in 2019?

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6.4% 6.3% 6.7% 6.7% 6.5% 6.2% 6.0% 5.7% 5.5% 5.3% 5.2% 4.2%

Year-Over-Year PRICE CHANGES 20 City Composite

Case Shiller

S&P Case Shiller 2/2019

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Source 2019 2020 2021 2022

HPES +4.3 +2.8 +2.5 +3.0 Zelman & Assoc. +3.5 +3.2

N/A N/A

MBA +4.5 +3 +1.9

N/A

Freddie Mac +4.1 +2.8

N/A N/A

NAR +2.2 +3.3

N/A N/A

Fannie Mae +4.2 +2.8

N/A N/A

Projected Home Price % Appreciation Going Forward

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Would housing demand (# of sales) soften if mortgage rates rise in the future?

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5,400 5,500 5,600 5,700 5,800 5,900 6,000 6,100 6,200

MBA Freddie Mac Fannie Mae

2018 2019

Total Home Sales (in thousands)

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We keep hearing of a recession. When might that happen? What will be the impact on the housing market?

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Surveys Projecting the next U.S. Recession

1. Wall Street Journal Survey of

Economists

2. Pulsenomics Survey of

Economists and Market Analysts

3. Duke University Survey of

American CFOs

4. National Association for Business

Economics Survey of Members

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8% 59% 22% 12% 24% 48% 14% 10%

47% 33% 9% 10%

10% 42% 25% 24%

2019 2020 2021 After 2021

Wall Street Journal Survey of Economists Pulsenomics survey of Analysts Duke Survey of CFOs National Association of Business Economics Members

When Will Next U.S. Recession Begin?

Pulsenomics, Duke, NABE and WSJ

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When Will Next U.S. Recession Begin?

Pulsenomics, Duke, NABE and WSJ

22% 46% 18% 14%

2019 2020 2021 After 2021

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6.1% 3.5%

1.9%

6.6%

19.7%

1980 1981 2001

CoreLogic National Home Price Index

HOME PRICE CHANGE

during Last 5 Recessions

1991 2008

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I hear that lending standards are beginning to loosen.

Isn’t that what caused the “bubble & burst” ten years ago? Why is it different now?

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Historic Data for the

MORTGAGE CREDIT AVAILABILITY INDEX

(a report from the Mortgage Bankers Association)

MBA

2004 378 2006 869 2008 118 TODAY 180

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“With additional ‘skin in the game,’ rising equity reduces the chances

f a foreclosure, helping to push

the foreclosure rate down to its lowest level since at least 2000.”

Frank Nothaft

Chief Economist for CoreLogic

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CoreLogic

Year-Over-Year Foreclosures

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Does Homeownership Matter? Is it still part of the American Dream?

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Census

Homeownership Rates

63.6 63.7 63.9 64.2 64.2 64.3 64.4 64.8

2017 Q1 2017 Q2 2017 Q3 2017 Q4 2018 Q1 2018 Q2 2018 Q3 2018 Q4

U.S. Percentage

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$64,200 $65,000 $81,400

$172,300

$15,288

$26,081

$43,164

$71,440

5Y 10Y 15Y 30Y

Price Appreciation Principal Payments Total Gains

Housing Wealth (Equity) Gains as of 2018

for a Typical Single-Family Home Purchased 5, 10, 15, 30 Years Ago

$243,740 $124,564 $91,081 $79,488

NAR

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The Spring Buyers’ Guide The Spring Sellers’ Guide

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