Market Update for March 2021

Market Update for March 2021

MARCH 2021

“Home sales could possibly reach 8 million if we had more inventory… Mortgage rates should remain very low throughout 2021, although we may have seen the lowest already.”

Lawrence Yun Chief Economist at NAR

Mortgage Rates Hit Three Percent March 4, 2021

“Since reaching a low point in January, mortgage rates have risen by more than 30 basis points, and the impact on purchase demand has been noticeable. While purchase activity remains high, it has cooled off over the last few weeks and is currently on par with early March, prior to the pandemic. However, the rise in mortgage rates over the next couple of months is likely to be more muted in comparison to the last few weeks, and we expect a strong spring sales season.” Sam Khater Chief Economist at Freddie Mac

3.90

Mortgage Rates Freddie Mac 30-Year Fixed Rate

3.70

3.50

3.30

3.10

3.02

2.90

2.70

January 2020 – Today

2.50

1/2

2/6

3/5

4/2

5/7

6/4

7/2

8/6

9/3

10/1

11/5

12/3

1/7

2/4

3/4

Freddie Mac

1.8% Repayment plans, short sales, deed-in-lieus

Upon exit from forbearance plan: 50.8% are paid in full

33.6% work out repayment plan 15.6% are still in trouble

13.8% No loss mitigation plan

27.9%

Made their monthly payments during their forbearance period

7.8%

Modification

7.5%

Loan paid off

25.8% Loan deferral

15.4%

Past due payments were brought current

Cumulative forbearance exits for the period from June 1, 2020 through February 14, 2021

MBA

Percentage of Overall Forbearances

8.47% 8.39%

7.74%

7.2%

6.87%

5.83%

5.48% 5.53% 5.38% 5.22%

May

June

July

Aug

Sept

Oct

Nov

Dec

Jan

Feb

MBA

“About 325,000 people will exit the forbearance program over the next six to nine months without a plan in place. Some— but probably not all—of those loans will likely default.”

DS News

Housing Inventory to Start Each Year

Actual Inventory

Potential Foreclosures 2021

939,582

825,945

813,924

764,869

650,404

722,187

325,000

325,404

January 2016 January 2017 January 2018 January 2019 January 2020 January 2021

Altos Research

“The lack of existing homes available for sale remains the only drag on housing market potential. Many homeowners may want to upgrade, but do not for fear that they will be unable to find a home to buy, preventing more supply from reaching the market and exacerbating the lack of inventory. As a result, everyone ‘stays put’ and the supply of homes for sale dwindles further.”

Odeta Kushi Deputy Chief Economist at First American

Year-Over-Year Change in Listings

20%

Total Listings

New Listings

10%

0%

Ea rly Ma rc h 5/30 6/6 6/13 6/20 6/27 7/4 7/11 7/18 7/25 8/1 8/8 8/15 8/22 8/29 9/5 9/12 9/19 9/26 10/3 10/10 10/17 10/24 10/31 11/7 11/14 11/21 11/28 12/5 12/12 12/19 12/26 1/2 1/9 1/16 1/23 1/30 2/6 2/13 2/20 2/27

-10%

-20%

-30%

-40%

-50%

-60%

move.com

“Home sales continue to ascend in the first month of the year, as buyers quickly snatched up virtually every new listing coming on the market… Sales easily could have been even 20% higher if there had been more inventory and more choices.”

Lawrence Yun Chief Economist at NAR

Inventory Levels – Months’ Supply

Existing Homes

4.4

3.9

3.4

Sweet Spot

2.9

2.4

1.9

Sweeter Spot

1.4

Sept

Oct

Nov Dec January 2020

Feb Mar

Apr May June Jul

Aug Sept

Oct

Nov Dec Jan 2021

NAR

“As the COVID-19 vaccine becomes more available and the economy improves, he predicts that more homeowners—realizing the equity gains in their homes—will list their existing homes and that could help alleviate some housing shortages.”

NAHB reporting comments by David Berson Chief Economist for Nationwide Mutual

HOME PRICE APPRECIATION

The S&P Case-Shiller U.S. National Home Price Index +10.4% Federal Housing Finance Agency House Price Index +10.8%

2020 Final House Appreciation Numbers

The CoreLogic U.S. National Home Price Index +9.2%

“A typical homeowner in 2020, just by being a homeowner, they would have accumulated around $24,000 in housing wealth.”

Lawrence Yun Chief Economist at NAR

“Nationally, house-buying power continues to exceed the median sale price and that implies housing is not overvalued today.” Mark Fleming Chief Economist at First American

Home Price Forecasts 2021

10.3%

5.9% Average of all forecasts

6.6%

6% 5.7%

5.3%

4.2%

3.3%

MBA

NAR

Zelman

realtor.com Freddie Mac

FannieMae

CoreLogic

Annual Home Price Appreciation

12.5%

11.4%

9.2%

8.5% 8.7%

6.4%

4.8% 4.7%

Average Annual Appreciation 10.3%

Average Annual Appreciation 6.3%

2002 2003 2004 2005

2017 2018 2019 2020

CoreLogic, Black Knight

YOY Change in Price – 2020 Q4

FHFA

YOY Change in Price – 2005 Q4

FHFA

“Consumers reported a significantly more positive view of home-selling conditions”

Fannie Mae

Now Available: Spring 2021 Seller Guide

Now Available: Spring 2021 Buyer Guide

Resources

Slide

Slide Title

Link

https://www.cnbc.com/2021/01/22/existing-home-sales-in-2020-were-highest-since-in-over-a- decade.html

2

Yun Quote - Rates

3

Khater Quote

https://freddiemac.gcs-web.com/node/22241/pdf

4

Mortgage Rates

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

https://www.mba.org/2021-press-releases/february/share-of-mortgage-loans-in-forbearance- declines-to-522-percent

5

Forbearance Exits

https://www.mba.org/news-research-and-resources/newsroom

6

Overall Forbearances

https://dsnews.com/daily-dose/02-08-2021/foreclosures-2021-what-to-expect-in-the-months- ahead

7

DS News Quote

8

Inventory with Foreclosures

https://twitter.com/mikesimonsen/status/1366520741458563073

https://blog.firstam.com/economics/housing-market-potential-poised-to-grow-in-2021 https://www.mykcm.com/2021/02/24/how-much-leverage-do-todays-house-sellers-have/

9

Kushi Quote

10

YOY Change in Listings

https://www.realtor.com/research/tag/housing-inventory/

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