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Page 1: Housing Market Overview 2017 Q1 · 2019-09-12 · Svenja joined Zillow in 2011 and leads the company’s industry-leading economic research team, a recognized voice of impartial,

Housing Market Overview 2017 Q1Zillow Economic Research

Page 2: Housing Market Overview 2017 Q1 · 2019-09-12 · Svenja joined Zillow in 2011 and leads the company’s industry-leading economic research team, a recognized voice of impartial,

ZILLOW HOUSING MARKET OVERVIEW | PAGE 2

About Zillow Economic Research

Real Estate Metrics• Zillow Home Value Index• Zillow Rent Index• Zillow Home Value Forecast• Zillow Rent Forecast• Negative Equity• For-Sale Inventory• Age of Inventory• List Prices• Sale Prices• Rental Prices• Home Sales• Home Value/Square Foot ($)• Price/Square Foot ($)• Listings with Price Cuts (%)• Median Price Cut (%)• Homes Sold for Loss/Gain (%)• Homes Foreclosed (out of 10k)• Foreclosure Re-sales (%)• Percent of Homes Increasing/Decreasing in Value• Homes Sold in the Past Year (%)• Cash Buyers• Price-to-Rent Ratios• Price-to-income Ratios• Mortgage and Rent Affordability• Buy-Rent Breakeven• Zillow Home Prices Expectations Survey• 15-minute Mortgage Rate Series:

Conventional/Jumbo• Existing Home Sales Forecast• New Home Sales Forecast• Case-Shiller Forecast

In-depth research and monthly reportswww.zillow.com/research

Data is available for download at:www.zillow.com/data

Page 3: Housing Market Overview 2017 Q1 · 2019-09-12 · Svenja joined Zillow in 2011 and leads the company’s industry-leading economic research team, a recognized voice of impartial,

ZILLOW HOUSING MARKET OVERVIEW | PAGE 3

Zillow Economic Research

Dr. Svenja Gudell, Chief Economist @SvenjaGudell

Svenja joined Zillow in 2011 and leads the company’s industry-leading economic research team, a recognized voice of impartial, data-driven economic analysis on the U.S. housing market. Under Svenja’s leadership, Zillow produces monthly reports on housing trends for more than 450 metros nationwide, with data often available down to the ZIP-code level. In addition, Svenja and her team publish original research on various real estate topics, ranging from rental and mortgage affordability, negative equity and forecasting, to policy, generational and mortgage research. Svenja has presented to various federal agencies and at numerous industry conferences, and has been widely quoted in national and local media.

Prior to joining Zillow, Svenja did economic, financial and strategy consulting for Analysis Group and was an Assistant Economist in the Research Group of the Federal Reserve Bank of New York. Svenja has a Bachelor of Arts in economics from the University of Rochester, a Master of Arts in economics from New York University, a Master of Science in business administration from the University of Rochester, and a Ph.D. in finance from the University of Rochester. Contact Svenja at [email protected]

Page 4: Housing Market Overview 2017 Q1 · 2019-09-12 · Svenja joined Zillow in 2011 and leads the company’s industry-leading economic research team, a recognized voice of impartial,

ZILLOW HOUSING MARKET OVERVIEW | PAGE 4

Zillow Economic Research

Dr. Skylar Olsen, Senior Economist

Skylar joined Zillow in the summer of 2012. Her research is used by consumers, policy makers, and other researchers to understand the real estate markets and make better decisions. While authoring numerous research projects such as A House Divided – How Race Colors the Path to Homeownership, she also creates many of Zillow’s real estate metrics, including the Buyer-Seller Index and the Buy-Rent Breakeven Horizon. She holds a Ph.D. in Economics from the University of Washington and specializes in the spatial patterns of housing and demographic change.

Dr. Krishna Rao, Director of Economic Product and Research@_KrishnaRao Krishna joined Zillow in the summer of 2013 after finishing a doctorate in economics from Stanford University focused on macroeconomics and finance. He graduated from Columbia University with a bachelor’s degree in economics and math. He also worked at the Federal Reserve Bank of New York, where he helped develop structural macroeconomic models to guide monetary policy. At Zillow, Krishna works primarily on building models to analyze market conditions and forecast future market trends and home prices.

Page 5: Housing Market Overview 2017 Q1 · 2019-09-12 · Svenja joined Zillow in 2011 and leads the company’s industry-leading economic research team, a recognized voice of impartial,

ZILLOW HOUSING MARKET OVERVIEW | PAGE 5

Zillow Economic Research

Aaron Terrazas, Senior Economist@AaronTerraz

Aaron is a Senior Economist at Zillow where his research focuses primarily on mortgage and rental markets. Previously he was an economist at the United States Treasury Department’s Office of Economic Policy, and a policy analyst at the Migration Policy Institute in Washington, D.C. He received his bachelor’s degree in international relations from Georgetown University and his master’s degree in applied economics from Johns Hopkins University.

Sarah Mikhitarian, Economist

Sarah joined Zillow in October 2015, working on unveiling current real estate market conditions, interesting patterns in the housing market and past and future market trends. Prior to joining Zillow, Sarah worked at the Institute for Health Metrics and Evaluation, where she conducted research aimed at understanding and improving national and global health and evaluating the performance of health systems. She received her undergraduate degree in both economics and Hispanic studies from Scripps College, and was awarded a Master of Arts in economics with a specialization in applied microeconometrics from the University of Washington.

Page 6: Housing Market Overview 2017 Q1 · 2019-09-12 · Svenja joined Zillow in 2011 and leads the company’s industry-leading economic research team, a recognized voice of impartial,

ZILLOW HOUSING MARKET OVERVIEW | PAGE 6

Zillow Group

Dr. Stan Humphries, Chief Analytics Officer@StanHumphries

Dr. Stan Humphries is the chief analytics officer of Zillow Group, a portfolio of the largest and most vibrant real estate and home-related brands on Web and mobile. Stan is the co-author of the New York Times Best Seller “Zillow Talk: Rewriting the Rules of Real Estate.”

As chief analytics officer, Stan oversees Zillow Group financial planning and analysis, corporate strategy, economic research, data science and engineering, marketing and business analytics, and pricing analytics. Stan was one of Zillow’s earliest pre-launch employees and is the creator of the Zestimate and its first algorithm.

Stan also serves as chief economist for Zillow Group. He has built out the industry-leading economics and analytics team at Zillow, a recognized voice of impartial, data-driven economic analysis on the U.S. housing market. Stan is a member of Fannie Mae’s Affordable Housing Advisory Council and the Commerce Department’s Data Advisory Council. Stan also serves on the Visiting Committee of the Department of Economics at the University of Washington.

Prior to joining Zillow, Stan spent five years at Expedia, where he ran the advanced analytics team. Before Expedia, Stan served as a researcher and faculty member at the University of Virginia, and was previously a Presidential Management Fellow where he served at NASA, the Office of Science and Technology Policy in the Executive Office of the President, and the Technology Administration within the Department of Commerce. Stan has also served in the United States Peace Corps, where he taught high school physics and chemistry in the West African country of Benin. Stan has a Bachelor of Arts from Davidson College, a Master of Science in foreign service from Georgetown University and a Ph.D. in government from the University of Virginia.

Page 7: Housing Market Overview 2017 Q1 · 2019-09-12 · Svenja joined Zillow in 2011 and leads the company’s industry-leading economic research team, a recognized voice of impartial,

ZILLOW HOUSING MARKET OVERVIEW | PAGE 7

About Zillow Economic Research .....................................................................................................2Zillow Economic Research .................................................................................................................. 3Zillow Group .............................................................................................................................................. 6Table of Contents .....................................................................................................................................7Home Values and Rents .......................................................................................................................10

Zillow Home Value Index .............................................................................................................................................. 11

Zillow Home Value Index, Annual and Monthly Growth .................................................................................. 12

Annual Home Value Growth ....................................................................................................................................... 13

Zillow Buy vs. Rent Breakeven Horizon ................................................................................................................. 14

Urban, Suburban and Rural Home Values ............................................................................................................ 15

Zillow Home Value Forecast ...................................................................................................................................... 16

Zillow Home Value Index, by Thirds ........................................................................................................................ 17

Annual Home Value Appreciation, by Thirds ...................................................................................................... 18

Zillow Rent Index ............................................................................................................................................................ 19

Annual Rent Appreciation .........................................................................................................................................20

Mulifamily and Single-Family Home Rents ........................................................................................................... 21

Urban, Suburban and Rural Rents .......................................................................................................................... 22

Zillow Rent Forecast .................................................................................................................................................... 23

Mortgage and Rent Affordability ....................................................................................................24

Table of Contents

Page 8: Housing Market Overview 2017 Q1 · 2019-09-12 · Svenja joined Zillow in 2011 and leads the company’s industry-leading economic research team, a recognized voice of impartial,

ZILLOW HOUSING MARKET OVERVIEW | PAGE 8

Zillow Mortgage and Rent Affordability ............................................................................................................... 25

Mortgage Affordability in the Largest Metro Areas ......................................................................................... 26

Zillow Mortgage Affordability, by Thirds .............................................................................................................. 27

Rent Affordability in the Largest Metro Areas ................................................................................................... 28

Household Income, by Thirds ................................................................................................................................... 29

Renters With No Savings ...........................................................................................................................................30

Commute Distances ...................................................................................................................................................... 31

Down Payment Sources Among First-Time Homebuyers ............................................................................. 32

Inventory, Construction and Demographics ...............................................................................33Zillow For-Sale Inventory ...........................................................................................................................................34

Zillow For-Sale Inventory, by Thirds ...................................................................................................................... 35

Days on Zillow ................................................................................................................................................................ 36

Home Sales ...................................................................................................................................................................... 37

New Residential Construction Permits ................................................................................................................. 38

Age of Sold Homes ....................................................................................................................................................... 39

Fixer-Upper Share of Listings ...................................................................................................................................40

New Construction Appreciation by Decade ........................................................................................................ 41

Repairs on New Construction Homes ...................................................................................................................42

Home Sale Prices ...........................................................................................................................................................43

Home and Lot Sizes .....................................................................................................................................................44

Age of Existing Home Buyers and New Construction Buyers .....................................................................45

Page 9: Housing Market Overview 2017 Q1 · 2019-09-12 · Svenja joined Zillow in 2011 and leads the company’s industry-leading economic research team, a recognized voice of impartial,

ZILLOW HOUSING MARKET OVERVIEW | PAGE 9

Typical Buyer Profile ................................................................................................................................................... 46

Single-Family Residence Rentals ............................................................................................................................ 47

Homeownership Views by Age ................................................................................................................................ 48

Share of Millennials Living With Their Parents ................................................................................................... 49

Comparing First-Time Buyers Now and Then (mid 1970s) ........................................................................... 50

Student Debt and Homeownership .........................................................................................................................51

Jobs, Negative Equity & Broader Economic Trends ................................................................ 52Negative Equity ..............................................................................................................................................................53

Negative Equity, by Race ........................................................................................................................................... 54

Negative Equity, by Thirds ..........................................................................................................................................55

Foreclosure Thirds ........................................................................................................................................................ 56

Boomerang Buyers ........................................................................................................................................................57

U.S. Homeownership Rate ......................................................................................................................................... 58

Newly Formed Households ....................................................................................................................................... 59

U.S. Homeownership Rate, by Race .......................................................................................................................60

Loan Applications .......................................................................................................................................................... 61

The Year in Mortgage Rates: 2016 .......................................................................................................................... 62

About Zillow ...........................................................................................................................................63

Page 10: Housing Market Overview 2017 Q1 · 2019-09-12 · Svenja joined Zillow in 2011 and leads the company’s industry-leading economic research team, a recognized voice of impartial,

ZILLOW HOUSING MARKET OVERVIEW | PAGE 10

HOME VALUES AND RENTS

• U.S. home values are growing at a steady pace and are on track to surpass pre-recession highs. Driven largely by limited inventory and high demand for less-expensive homes, home values are growing fastest at the bottom end of the market.

• Regionally, markets in the Pacific Northwest, Texas, Florida and parts of the Southwest continue to outperform slower-moving markets in the Midwest and Mid-Atlantic.

• Growth in national rents flattened in the second half of 2016, though pockets of strong appreciation remain in the Pacific Northwest and California.

Page 11: Housing Market Overview 2017 Q1 · 2019-09-12 · Svenja joined Zillow in 2011 and leads the company’s industry-leading economic research team, a recognized voice of impartial,

ZILLOW HOUSING MARKET OVERVIEW | PAGE 11

2001 2003 2005 2007 2009 2011 2013 2015 2017

$120K

$130K

$140K

$150K

$160K

$170K

$180K

$190K

$200K

Zill

ow

Ho

me

Val

ue In

dex

$196,500

U.S. home values are nearing pre-recession highs.

Source: Zillow Home Value Index (March 2017)

-22.9% -0.1% +6.8%Peak-to-Trough Peak-to-Current Year-over-Year

Zillow Home Value Index

Page 12: Housing Market Overview 2017 Q1 · 2019-09-12 · Svenja joined Zillow in 2011 and leads the company’s industry-leading economic research team, a recognized voice of impartial,

ZILLOW HOUSING MARKET OVERVIEW | PAGE 12

2001 2003 2005 2007 2009 2011 2013 2015 2017

-8.0%

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

Yea

r-o

ver-

Yea

r C

hang

e in

ZH

VI

-1.0%

-0.8%

-0.6%

-0.4%

-0.2%

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

Mo

nth-

ove

r-M

ont

h C

hang

e in

ZH

VI

6.8%

0.4%

Annual Home Value Growth Monthly Home Value Growth

Annual U.S. home value appreciation accelerated in the second half of 2016.

Source: Zillow Home Value Index (March 2017)

Zillow Home Value Index, Annual and Monthly Growth

Page 13: Housing Market Overview 2017 Q1 · 2019-09-12 · Svenja joined Zillow in 2011 and leads the company’s industry-leading economic research team, a recognized voice of impartial,

ZILLOW HOUSING MARKET OVERVIEW | PAGE 13

Washington, DC3.8%

Tampa, FL11.4%

Seattle, WA11.6%

San Francisco, CA4.4%

San Diego, CA5.2%

Sacramento, CA8.2%

Portland, OR7.2%

Pittsburgh, PA4.8%

Phoenix, AZ6.4%

Philadelphia, PA4.4%

Orlando, FL10.0%

New York, NY7.6%

Minneapolis, MN7.7%

Los Angeles, CA6.1%

Las Vegas, NV9.9%

Kansas City, MO5.9%

Houston, TX3.2%

Detroit, MI10.1%

Denver, CO9.5%

Dallas, TX11.0%

Columbus, OH4.8%

Cincinnati, OH6.7%

Chicago, IL6.4%

Boston, MA7.0%

Austin, TX7.3%

Atlanta, GA7.1%

St. Louis, MO6.2%

Miami, FL8.7%

3.2% 11.6%Annual Home Value Growth

Markets in the Pacific Northwest, Texas, Florida and parts of the Southwest continue to outperform slower-moving markets in the Midwest and Mid-Atlantic.

Source: Zillow Home Value Index (March 2017)

Annual Home Value Growth

Page 14: Housing Market Overview 2017 Q1 · 2019-09-12 · Svenja joined Zillow in 2011 and leads the company’s industry-leading economic research team, a recognized voice of impartial,

ZILLOW HOUSING MARKET OVERVIEW | PAGE 14

Depending how long a resident stays in a home, buying is often a better bargain than renting. In many areas, buyers can break even on a home purchase in as little as 1-2 years.

Source: Zillow Breakeven Horizon, Top 100 Metros (2016 Q4)

1. Honolulu, HI: 6.8 years

2. San Jose, CA: 5.1 years

3. San Francisco, CA: 4.5 years

4. Santa Rosa, CA: 4.4 years

5. Los Angeles, CA: 4.1 years

Metros with the

Longest Breakevens

1. Memphis, TN: 1.1 years

2. Jackson, MS: 1.3 years

3. Lakeland, FL: 1.3 years

4. Indianapolis, IN: 1.4 years

5. Orlando, FL: 1.4 years

Metros with the

Shortest Breakevens

Zillow Buy vs. Rent Breakeven Horizon

Page 15: Housing Market Overview 2017 Q1 · 2019-09-12 · Svenja joined Zillow in 2011 and leads the company’s industry-leading economic research team, a recognized voice of impartial,

ZILLOW HOUSING MARKET OVERVIEW | PAGE 15

2001 2006 2011 2016$80K

$100K

$120K

$140K

$160K

$180K

$200K

$220K

$240K

$260K

$280K

$300K

Zill

ow

Ho

me

Val

ue In

dex

$151,120

$225,075

$295,960

2001 2006 2011 2016

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

Ann

ual H

om

e V

alue

Ap

pre

ciat

ion

7.0%

5.1%

8.6%

Urban Suburban Rural

Urban homes are worth more than suburban homes and are growing at a faster pace.

Source: Zillow Home Value Index (March 2017)

Urban, Suburban and Rural Home Values

Page 16: Housing Market Overview 2017 Q1 · 2019-09-12 · Svenja joined Zillow in 2011 and leads the company’s industry-leading economic research team, a recognized voice of impartial,

ZILLOW HOUSING MARKET OVERVIEW | PAGE 16

0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0%

Expected Home Value Appreciation through March 2018

Seattle, WA

Dallas, TX

New York, NY

Riverside, CA

Minneapolis, MN

Detroit, MI

Tampa, FL

Boston, MA

Atlanta, GA

Chicago, IL

United States

Philadelphia, PA

Baltimore, MD

Phoenix, AZ

Houston, TX

St. Louis, MO

Washington, VA

San Diego, CA

Los Angeles, CA

San Francisco, CA

Miami, FL

0.6%

0.6%

0.9%

0.8%

4.4%

4.8%

2.6%

2.6%

3.8%

3.8%

3.5%

3.2%

3.2%

2.3%

1.8%

3.1%

3.1%

1.5%

1.5%

1.2%

1.7%

Home value growth is expected to slow through 2018 Q1

Source: Zillow Home Value Forecast, Top 20 Metros (March 2017)

Zillow Home Value Forecast

Page 17: Housing Market Overview 2017 Q1 · 2019-09-12 · Svenja joined Zillow in 2011 and leads the company’s industry-leading economic research team, a recognized voice of impartial,

ZILLOW HOUSING MARKET OVERVIEW | PAGE 17

1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017$0K

$50K

$100K

$150K

$200K

$250K

$300K

$350K

Med

ian

Ho

me

Val

ues

$353,300

$196,500

$113,000

Bottom Third Zillow Home Value Index Top Third

Zillow Home Value Index, by Thirds

Source: Zillow Home Value Index (March 2017)

Year-over-Year % Change

9.7% 6.8% 4.8%Bottom Third Median Top Third

Page 18: Housing Market Overview 2017 Q1 · 2019-09-12 · Svenja joined Zillow in 2011 and leads the company’s industry-leading economic research team, a recognized voice of impartial,

ZILLOW HOUSING MARKET OVERVIEW | PAGE 18

1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018-10.0%

-8.0%

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

Ann

ual H

om

e V

alue

Gro

wth

4.8%

6.8%

9.7%

Bottom Third Zillow Home Value Index Top Third

Annual Home Value Appreciation, by Thirds

Source: Zillow Home Value Index (March 2017)

Home value appreciation for bottom-third homes continues to outpace home value growth in top-third homes.

Page 19: Housing Market Overview 2017 Q1 · 2019-09-12 · Svenja joined Zillow in 2011 and leads the company’s industry-leading economic research team, a recognized voice of impartial,

ZILLOW HOUSING MARKET OVERVIEW | PAGE 19

2012 2013 2014 2015 2016 2017$1,240

$1,260

$1,280

$1,300

$1,320

$1,340

$1,360

$1,380

$1,400

Zill

ow

Ren

t In

dex

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

Yea

r-O

ver-

Yea

r C

hang

e in

Zill

ow

Ren

t In

dex

$1,408

0.7%

Zillow Rent Index Annual Rent Growth

Growth in rents flattened in the second half of 2016.

Source: Zillow Rent Index (March 2017)

Zillow Rent Index

Page 20: Housing Market Overview 2017 Q1 · 2019-09-12 · Svenja joined Zillow in 2011 and leads the company’s industry-leading economic research team, a recognized voice of impartial,

ZILLOW HOUSING MARKET OVERVIEW | PAGE 20

Washington, DC-0.3%

Tampa, FL2.7%

Seattle, WA6.7%

San Francisco, CA-0.1%

San Diego, CA3.4%

Sacramento, CA4.7%

Portland, OR4.6%

Pittsburgh, PA-4.6%

Phoenix, AZ2.5%

Philadelphia, PA0.0%

Orlando, FL3.2%

New York, NY-1.3%

Minneapolis, MN3.4%

Los Angeles, CA4.4%

Las Vegas, NV1.3%

Kansas City, MO1.5%

Houston, TX-2.5%

Detroit, MI1.2%

Denver, CO0.7%

Dallas, TX3.2%

Columbus, OH1.2%

Chicago, IL-1.9%

Boston, MA4.0%

Austin, TX-0.6%

Atlanta, GA3.2%

St. Louis, MO0.3%

Cincinnati, OH1.9%

-4.6% 6.7%Annual Rent Growth

Annual rent growth is strongest in the Pacific Northwest.

Source: Zillow Rent Index (March 2017)

Annual Rent Appreciation

Page 21: Housing Market Overview 2017 Q1 · 2019-09-12 · Svenja joined Zillow in 2011 and leads the company’s industry-leading economic research team, a recognized voice of impartial,

ZILLOW HOUSING MARKET OVERVIEW | PAGE 21

2012 2014 2016

$1,250

$1,300

$1,350

$1,400

$1,450

$1,500

$1,550

Zill

ow

Ren

t In

dex

(Z

RI)

$1,393

$1,542

2012 2013 2014 2015 2016 2017-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

Yea

r-o

ver-

Yea

r C

hang

e in

ZR

I

6.6%

1.2%

6.1%

0.9%

Multifamily Units Single-Family Homes

Rents for single-family homes and units in larger multifamily buildings share similar trends.

Source: Zillow Rent Index (March 2017)

Mulifamily and Single-Family Home Rents

Page 22: Housing Market Overview 2017 Q1 · 2019-09-12 · Svenja joined Zillow in 2011 and leads the company’s industry-leading economic research team, a recognized voice of impartial,

ZILLOW HOUSING MARKET OVERVIEW | PAGE 22

2011 2012 2013 2014 2015 2016 2017

$1,100

$1,200

$1,300

$1,400

$1,500

$1,600

$1,700

$1,800

Zill

ow

Ren

t In

dex

$1,176

$1,550

$1,830

Urban Suburban Rural

2012 2013 2014 2015 2016 2017-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

Ann

ual R

ent

Ap

pre

ciat

ion

2.3%

2.5%

0.2%

Rents in the city are higher than rents in the suburbs

Source: Zillow Rent Index (March 2017)

Urban, Suburban and Rural Rents

Page 23: Housing Market Overview 2017 Q1 · 2019-09-12 · Svenja joined Zillow in 2011 and leads the company’s industry-leading economic research team, a recognized voice of impartial,

ZILLOW HOUSING MARKET OVERVIEW | PAGE 23

-1.0% -0.5% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% 5.5%Expected Rent Appreciation Through March 2018

Seattle, WA

Boston, MA

Los Angeles, CA

Dallas, TX

Minneapolis, MN

Riverside, CA

Phoenix, AZ

San Diego, CA

Tampa, FL

Miami, FL

Washington, DC

Philadelphia, PA

United States

Atlanta, GA

Detroit, MI

St. Louis, MO

Houston, TX

San Francisco, CA

Chicago, IL

Baltimore, MD

New York, NY

-0.6%

-0.6%

-0.8%

-0.8%

-0.3%

-0.5%

-0.2%

4.0%

0.9%

0.5%

2.0%

2.4%

2.4%

2.6%

2.6%

2.9%

3.5%

5.2%

1.4%

1.1%

1.1%

Growth in rents over the next year is expected to slow further.

Source: Zillow Rent Forecast (March 2017)

Zillow Rent Forecast

Page 24: Housing Market Overview 2017 Q1 · 2019-09-12 · Svenja joined Zillow in 2011 and leads the company’s industry-leading economic research team, a recognized voice of impartial,

ZILLOW HOUSING MARKET OVERVIEW | PAGE 24

MORTGAGE AND RENT AFFORDABILITY

• Overall, mortgage affordability – the share of income necessary to afford a typical mortgage payment – looks reasonable in most markets. But affordability is suffering, especially at the bottom end of the market, as home values rise and incomes fail to keep pace.

• As mortgage interest rates rise, mortgage affordability will also suffer, although there’s some headroom for rates to rise before this really becomes problematic.

• Unlike mortgage affordability, rental affordability is worse than ever in many areas, and is unlikely to significantly improve soon.

• Poor rent affordability is worrisome, as more money devoted to rent makes it more difficult to save for homeownership.

Page 25: Housing Market Overview 2017 Q1 · 2019-09-12 · Svenja joined Zillow in 2011 and leads the company’s industry-leading economic research team, a recognized voice of impartial,

ZILLOW HOUSING MARKET OVERVIEW | PAGE 25

1988 1993 1998 2003 2008 2013 201812%

14%

16%

18%

20%

22%

24%

26%

28%

30%

22%

20%

18%

29%

16%

Average Share of Income Spent on Rent, 1985-2000

Average Share of Income Spent on Mortgage, 1985-2000

Average Share ofIncome Spent on

Mortgage,1985-2000

Share of IncomeSpent on Mortgage,

2017 Q1

Forecasted at 5%Rates

Forecasted at 6%Rates

Forecasted at 7%Rates

Average Share ofIncome Spent onRent, 1985-2000

Share of IncomeSpent on Rent,

2017 Q1

29%26%22%20%18%16%21%

Share of Income Spent on Housing

Nationwide, the share of income spent on a mortgage is well below historic norms.

Source: Zillow Mortgage Affordability, Zillow Rent Affordability (2017 Q1)

Zillow Mortgage and Rent Affordability

Page 26: Housing Market Overview 2017 Q1 · 2019-09-12 · Svenja joined Zillow in 2011 and leads the company’s industry-leading economic research team, a recognized voice of impartial,

ZILLOW HOUSING MARKET OVERVIEW | PAGE 26

Atl

anta

, GA

Bo

sto

n, M

A

Chi

cag

o, I

L

Den

ver,

CO

Ho

usto

n, T

X

Mia

mi,

FL

New

Yo

rk, N

Y

Po

rtla

nd, O

R

San

Fra

ncis

co, C

A

Sea

ttle

, WA

Uni

ted

Sta

tes

Was

hing

ton,

DC

0.0%

20.0%

40.0%

60.0%

Sha

re o

f In

com

eS

pen

t o

n M

ort

gag

e

Share of Income Spent on Mortgage, 2017 Q1Average Share of Income Spent on Mortgage, 1985-2000

Forecasted at 5% RatesForecasted at 6% Rates

Forecasted at 7% Rates

Source: Zillow Mortgage Affordability (2017 Q1)

Share of Income Spent on Mortgage, 2016 Q4 13% 24% 15% 23% 13% 22% 27% 25% 43% 26% 16% 19%

Average Share of Incomes Spent on Mortgage, 1985-2000 19% 26% 23% 22% 15% 20% 30% 23% 38% 25% 21% 22%

Forecasted at 5% Rates 15% 27% 17% 26% 15% 25% 31% 28% 47% 30% 18% 20%

Forecasted at 6% Rates 17% 30% 19% 30% 16% 27% 34% 32% 53% 33% 20% 23%

Forecasted at 7% Rates 18% 34% 21% 33% 18% 30% 38% 35% 59% 37% 22% 26%

Mortgage Affordability in the Largest Metro Areas

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ZILLOW HOUSING MARKET OVERVIEW | PAGE 27

Weak income growth and rapid appreciation, even with very low mortgage interest rates, means homes are becoming more unafforable, more quickly for bottom-third home buyers.

Source: Zillow Mortgage Affordability (2016 Q2)

Zillow Mortgage Affordability, by Thirds

2000 2002 2004 2006 2008 2010 2012 2014 20160.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

11.2%

14.2%

22.7%

Bottom Third Middle Third Top Third

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ZILLOW HOUSING MARKET OVERVIEW | PAGE 28

Atl

anta

, GA

Bal

tim

ore

, MD

Bo

sto

n, M

A

Chi

cag

o, I

L

Dal

las,

TX

Den

ver,

CO

Det

roit

, MI

Ho

usto

n, T

X

Los

Ang

eles

, CA

Min

neap

olis

, MN

New

Yo

rk, N

Y

Phi

lad

elp

hia,

PA

Pho

enix

, AZ

Riv

ersi

de,

CA

San

Die

go

, CA

San

Fra

ncis

co, C

A

Sea

ttle

, WA

St.

Lo

uis,

MO

Tam

pa,

FL

Uni

ted

Sta

tes

Was

hing

ton ,

DC

0%

10%

20%

30%

40%

50%S

hare

of

Inco

me

Sp

ent

on

Ren

t

Rent A�ordability, 2017 Q1Average Rent A�ordability, 1985-2000

Rent Affordability in the Largest Metro Areas

Source: Zillow Rent Affordability, Top 20 Metros (2017 Q1)

Share of Income Spent on Rent, 2016 Q4 25% 28% 34% 29% 30% 33% 25% 30% 49% 25% 40% 27% 27% 36% 42% 43% 32% 23% 32% 29% 26%

Average Share of Income Spent on Rent, 1985-2000

19% 27% 26% 25% 22% 24% 20% 24% 36% 21% 26% 21% 23% 33% 35% 31% 24% 21% 28% 26% 18%

The share of income spent on rent is higher than the historic average in the nation’s 20 largest metros.

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ZILLOW HOUSING MARKET OVERVIEW | PAGE 29

2000 2002 2004 2006 2008 2010 2012 2014 2016$0K

$20K

$40K

$60K

$80K

$100K

$120K

$140K

Ho

useh

old

Inco

me

$134,000

$57,079

$20,495

Bottom Third Middle Third Top Third

Income growth for the lowest earners has been especially weak.

Source: Zillow analysis of U.S. Census Bureau ACS data, IPUMS (2016 Q2)

Income Growth, 2000-2016

48.3%Top Third

35.1%Middle Third

32.2%Bottom Third

Household Income, by Thirds

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ZILLOW HOUSING MARKET OVERVIEW | PAGE 30

12.5% or less 12.6% to 19.4% 19.5% to 27.3% 27.3% to 45.3% 45.4% or more0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

Sha

re o

f R

ente

rs S

avin

g N

oth

ing

43.3%

33.6%

55.6%

38.3%

67.2%

Share of Income Spent on Rent

As the share of income spent on rent rises, more renters report saving nothing.

Source: Zillow analysis of data from the Federal Reserve Board, Survey of Household Economics and Decisionmaking 2015 and 2016, and the U.S. Census Bureau, ACS, IPUMS

Renters With No Savings

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ZILLOW HOUSING MARKET OVERVIEW | PAGE 31

Miami, FL Philadelphia, PA San Francisco, CA Seattle, WA

2006 2010 2014 2006 2010 2014 2006 2010 2014 2006 2010 20146.0

7.0

8.0

9.0

10.0

11.0

12.0

13.0

14.0

15.0

Med

ian

Co

mm

ute

Dis

tanc

e to

Do

wnt

ow

n C

ore

, Mile

s

12.6

13.3

7.8

9.5 9.1

10.5

15.4

11.9

Annual income $40K or more Annual income $15K or less

Lower-income workers with jobs in major downtown cores have steadily moved farther away from city centers, sacrificing distance for affordability.

Source: Zillow analysis of U.S. Census Bureau, Longitudinal Employer-Household Dynamics, Origin-Destination Employment Statistics, 2002-2014

Commute Distances

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ZILLOW HOUSING MARKET OVERVIEW | PAGE 32

GovernmentProgram orNon-Profit

Organization

Loan or Gift fromFamily and Friends No Down Payment Personal Savings Second Mortgage Other source

0%

10%

20%

30%

40%

50%

60%

70%

80%

Sha

re O

f B

uyer

s

3.9%6.3%

25.1%

8.2%

31.7%

10.1%

58.9%

79.2%

18.5%

1.5% 2.3% 2.1%

Pre-Recession Post-Recession

Resourceful first-time home buyers are scraping together down payments from a number of different sources.

Source: Zillow analysis of Federal Reserve Board, Survey of Household Economics and Decisionmaking, 2014

Down Payment Sources Among First-Time Homebuyers

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ZILLOW HOUSING MARKET OVERVIEW | PAGE 33

INVENTORY, CONSTRUCTION AND DEMOGRAPHICS

• Inventory of homes for sale is very low, and getting lower. Inventory constraints are particularly acute among entry-level and median homes – the exact homes sought by first-time homebuyers and young families.

• New construction has thus far failed to get back to pre-recession levels, especially for single-family homes.

• A lack of inventory overall means those homes that are on the market are selling faster – currently, homes spend about a week less on the market before selling than they did a year ago.

• Millennials do value homeownership, but many are finding it difficult to attain, and more young adults are living with their parents.

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ZILLOW HOUSING MARKET OVERVIEW | PAGE 34

2010 2011 2012 2013 2014 2015 2016 2017

1,400K

1,500K

1,600K

1,700K

1,800K

1,900K

2,000K

2,100K

2,200K

2,300K

Fo

r-S

ale

Inve

nto

ry

1,378,176

The number of U.S. homes for sale is low, and falling.

Source: Zillow For-Sale Inventory (Seasonally Adjusted, Smoothed) (March 2017)

-41.3% -5.3%Peak-to-Current Year-over-Year

Zillow For-Sale Inventory

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ZILLOW HOUSING MARKET OVERVIEW | PAGE 35

2010 2011 2012 2013 2014 2015 2016 20170K

100K

200K

300K

400K

500K

600K

700K

800K

900K

Sm

oo

thed

Sea

sona

lly A

dju

sted

Inve

nto

ry

321,745

301,119

591,316

Bottom Third Middle Third Top Third

Inventory shortages are particularly acute among bottom- and middle-third homes.

Source: Zillow For-Sale Inventory (Seasonally Adjusted, Smoothed) (March 2017)

-7.5% -8.7% -3.2%Bottom Third Middle Third Top Third

Year-over-Year % Change

Zillow For-Sale Inventory, by Thirds

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ZILLOW HOUSING MARKET OVERVIEW | PAGE 36

2010 2011 2012 2013 2014 2015 2016 2017

80

90

100

110

120

130

140

Day

s o

n Z

illo

w

91

Homes listed for sale are selling more quickly than in the past few years.

Source: Zillow Days on Zillow, Including REOs (March 2017)

Days on Zillow

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ZILLOW HOUSING MARKET OVERVIEW | PAGE 37

2000 2002 2004 2006 2008 2010 2012 2014 2016 20180.0M

1.0M

2.0M

3.0M

4.0M

5.0M

6.0M

7.0M

Exi

stin

g H

om

e S

ales

0K

200K

400K

600K

800K

1,000K

1,200K

1,400K

New

Ho

me

Sal

es

5.7M

621K

Existing Home Sales(NAR: SFR/Condo/Co-op, SAAR)New Home Sales (U.S. Census Bureau: SFR, SAAR)

Sales of new homes in particular have struggled to get back to pre-recession levels.

Source: National Association of Realtors, U.S. Census Bureau (March 2017)

Home Sales

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ZILLOW HOUSING MARKET OVERVIEW | PAGE 38

1994 1999 2004 2009 20140K

200K

400K

600K

800K

1,000K

1,200K

1,400K

1,600K

1,800K

New

Pri

vate

Ho

usin

g U

nits

Aut

hori

zed

by

Bui

ldin

gP

erm

its

(Sea

sona

lly A

dju

sted

Ann

ual R

ates

)

823K

401K

In structures with 1 unitIn structures with 5+ units

Permits for new multifamily projects are near pre-recession levels, while single-family permits remain low.

Source: U.S. Census Bureau: New Residential Construction (March 2017)

New Residential Construction Permits

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ZILLOW HOUSING MARKET OVERVIEW | PAGE 39

2000 2002 2004 2006 2008 2010 2012 2014 20160

3

6

9

12

15

18

21

24

27

30

Med

ian

Ag

e o

f S

old

Ho

mes

2006: 15 years

2015: 28 years

The age of sold homes has almost doubled since the housing collapse, largely because of a lack of new construction.

Source: Zillow analysis of public record transactions, 2015

Age of Sold Homes

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ZILLOW HOUSING MARKET OVERVIEW | PAGE 40

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Percent of Housing Stock Built 30+ Years Ago

0

5

10

15

20

25

Num

ber

of

Fix

er-U

pp

ers

Per

1k

Lis

ting

s

San Francisco, CA

Los Angeles, CA

Las Vegas, NV

Sacramento, CA

Housing markets with older homes see more listings marketed as fixer-uppers.

Source: Zillow analysis of Zillow listing descriptions and home attributes

Fixer-Upper Share of Listings

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ZILLOW HOUSING MARKET OVERVIEW | PAGE 41

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

Ann

ual A

pp

reci

atio

n O

ver

the

Nex

t D

ecad

e

New homes built in 1997appreciated an average of 5.7% peryear over their first decade ofexistence.

New construction isappreciating fasterthan existing housingstock

Existing Housing Stock New Construction

Newly constructed homes held their value better during the recession.

Source: Zillow analysis of home values (Zestimates) appreciation of new and existing homes over time

New Construction Appreciation by Decade

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ZILLOW HOUSING MARKET OVERVIEW | PAGE 42

1950s 1960s 1970s 1980s 1990s 2000s 2010s0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

50.0%

55.0%

60.0%

% o

f H

om

ebuy

ers

Mak

ing

Maj

or

Rep

airs

43.4%

29.4%

33.9%

56.3%

24.2% 23.8%

39.1%Less than 1 in 4 buyersof recently built homes

paid for majorrenovations within thefirst year of owning.

Decade of Construction

Buyers of newly constructed homes also pay less in repairs after moving in.

Source: Zillow Group Consumer Housing Trends Report 2016

Repairs on New Construction Homes

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ZILLOW HOUSING MARKET OVERVIEW | PAGE 43

2001 2003 2005 2007 2009 2011 2013 2015 2017$0K

$50K

$100K

$150K

$200K

$250K

$300K

$350K

Med

ian

Sal

e P

rice

$243K

$315K

Existing Homes New Homes

The price gap between newly built and existing homes is widening.

Source: National Association of Realtors and U.S. Census Bureau Construction Review (March 2017)

Home Sale Prices

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ZILLOW HOUSING MARKET OVERVIEW | PAGE 44

2000 2002 2004 2006 2008 2010 2012 2014

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

Per

cent

Cha

nge

in M

edia

n H

om

e S

ize

and

Med

ian

Lot

Siz

e S

ince

19

99

24.4%

-10.4%

Lot Square Feet Structure Square Feet Note: Centered 6-month moving average

Since 1999, homes have gotten larger while lots have gotten smaller.

Source: Zillow analysis of U.S. Census Bureau: Survey of Construction microdata, 2000-2016

Home and Lot Sizes

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ZILLOW HOUSING MARKET OVERVIEW | PAGE 45

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%Share of Buyers

Existinghomes

Newconstruction

2.5%

4.7%20.5%

22.9%

25.3%

23.7%

16.8%16.8%

16.5%

15.8%

15.3% 19.1%

65+ years 55-64 years 45-54 years 35-44 years 25 - 34 years 18-24 years

Millennials make up 30% of existing home buyers, and 26.2% of new construction buyers.

Source: Zillow analysis of U.S. Census Bureau, American Community Survey, 2014, made available by the University of Minnesota, IPUMS-USA

Age of Existing Home Buyers and New Construction Buyers

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ZILLOW HOUSING MARKET OVERVIEW | PAGE 46

Typical Buyer Profile

Source: Zillow analysis of U.S. Census Bureau, American Community Survey, 2014, made available by the University of Minnesota, IPUMS-USA

Existing Homes New Construction

$95KIncome

25 minutesTypical Commute Time

75.5% marriedMarital Status

46.1%Have at least one child

26.2%Millennial Share

$70KIncome

56.6% marriedMarital Status

40%Have at least one child

30%Millennial Share

20 minutesTypical Commute Time

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ZILLOW HOUSING MARKET OVERVIEW | PAGE 47

1980 1985 1990 1995 2000 2005 2010 2015

13.0%

14.0%

15.0%

16.0%

17.0%

18.0%

19.0%

Sha

re o

f S

FR

s th

at a

re R

ente

d

19.2%

Renting single-family homes is increasingly popular.

Source: Zillow analysis of U.S. Census Bureau, Current Population Survey 2016, made available by University of Minnesota, IPUMS-USA

Single-Family Residence Rentals

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ZILLOW HOUSING MARKET OVERVIEW | PAGE 48

Owning a home is necessaryto live The Good Life and The

American Dream

Owning a home is necessaryto be a repected member of

society

Owning provides a personmore freedom

Buying a home is the bestlong-term investment a

person can make

18-34 35-49 50-64 65+ 18-34 35-49 50-64 65+ 18-34 35-49 50-64 65+ 18-34 35-49 50-64 65+

66%

63%

58% 58%

40%

30%

48%

31%

63% 63%65%

75%

64%63%

65%

71%

Millennials do have positive views of homeownership and their opinions tend to align most closely with those of their grandparents.

Source: Zillow Housing Confidence Index (July 2016)

Homeownership Views by Age

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ZILLOW HOUSING MARKET OVERVIEW | PAGE 49

1970 1975 1980 1985 1990 1995 2000 2005 2010 2015

26.0%

27.0%

28.0%

29.0%

30.0%

31.0%

32.0%

33.0%

34.0%

Sha

re o

f Y

oun

g A

dul

ts L

ivin

g w

ith

The

ir P

aren

ts

33.9%

The share of millennials (age 18-34) living with their parents has increased sharply in the past decade.

Source: U.S. Census Bureau: Current Population Survey, March Supplement, 2016, made available by the University of Minnesota, IPUMS-USA

Share of Millennials Living With Their Parents

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ZILLOW HOUSING MARKET OVERVIEW | PAGE 50

1975-1979 2010-2013

32.5 years oldAverage age

$54KIncome in today’s dollars

2 people Household size

6 years Years renting before buying

$140KHome value in today’s dollars

29 years oldAverage age

2.6 people Household size

4.6 years Years renting before buying

$99KHome value in today’s dollars

$55KIncome in today’s dollars

Comparing First-Time Buyers Now and Then (mid 1970s)

Source: Zillow analysis of University of Michigan Panel Survey of Income Dynamics, 1970-2013

Today’s first-time home buyer is more than three years older and typically rents longer before making the jump into homeownership compared to previous generations.

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ZILLOW HOUSING MARKET OVERVIEW | PAGE 51

None Associate's Bachelor's Master's Doctorate

$0K $40K $0K $40K $0K $20K $40K $0K $40K $0K $40K

10%

20%

30%

40%

50%

60%

70%

80%

90%

Pro

bab

ility

of

Ho

meo

wne

rshi

p

48%

33%

73%

57%

70%

66%

80%

75%

87%

84%

Student Loan Amount

Highest Degree Attained

Student Debt and Homeownership

Source: Zillow analysis of University of Michigan Panel Survey of Income Dynamics, 2013

Generally, more completed education corresponds with better homeownership odds, regardless of debt level.

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ZILLOW HOUSING MARKET OVERVIEW | PAGE 52

JOBS, NEGATIVE EQUITY & BROADER ECONOMIC TRENDS

• The U.S. negative equity rate has fallen consistently for four years, but more than 5 million homeowners remain trapped underwater. These homeowners are more likely to live in less expensive homes, contributing to inventory shortages.

• The homeownership rate is at multi-decade lows, as renters stay renting longer and would-be buyers find it difficult to enter the market.

• For the homeownership rate to climb meaningfully, it will need to be driven by younger and minority Americans finding ways to successfully buy homes.

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ZILLOW HOUSING MARKET OVERVIEW | PAGE 53

2011

Q2

2011

Q3

2011

Q4

2012

Q1

2012

Q2

2012

Q3

2012

Q4

2013

Q1

2013

Q2

2013

Q3

2013

Q4

2014

Q1

2014

Q2

2014

Q3

2014

Q4

2015

Q1

2015

Q2

2015

Q3

2015

Q4

2016

Q1

2016

Q2

2016

Q3

2016

Q4

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

22.0%

24.0%

26.0%

28.0%

30.0%

32.0%

Per

cent

of

Ho

mes

wit

h a

Mo

rtg

age

in N

egat

ive

Eq

uity

21.0%

19.4%18.8%

17.9%

23.8%

16.9%16.9%

31.4%31.1% 30.9%

30.6%

10.5%

25.4%

10.9%

15.4%

30.0%

14.4%

12.1%

27.5%

12.7%

28.2%

13.4%13.1%

Negative equity has declined steadily since early 2012.

Source: Zillow Negative Equity (2016 Q4)

Negative Equity

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ZILLOW HOUSING MARKET OVERVIEW | PAGE 54

Black Hispanic National White0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

Sha

re o

f H

om

eow

ners

Wit

h a

Mo

rtg

aged

Ho

me

in N

egat

ive

Eq

uity

10.5%

18.9%

11.5%

9.6%

The negative equity rate in largely black communities is more than twice as high as the negative equity rate in predominantly white communities.

Source: Zillow Negative Equity (2016 Q4)

Negative Equity, by Race

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ZILLOW HOUSING MARKET OVERVIEW | PAGE 55

0.0% 20.0% 40.0%Bottom Third

0.0% 20.0% 40.0%Middle Third

0.0% 20.0% 40.0%Top Third

United States

Atlanta, GA

Baltimore, MD

Boston, MA

Chicago, IL

Detroit, MI

Los Angeles, CA

Miami, FL

Minneapolis, MN

New York, NY

Philadelphia, PA

Phoenix, AZ

Riverside, CA

San Diego, CA

San Francisco, CA

Seattle, WA

St. Louis, MO

Tampa, FL

Washington, DC

25.9%

26.2%

27.6%

25.5%

37.5%

14.0%

19.0%

19.4%

19.9%

21.6%

13.8%

17.8%

16.1%

11.3%

9.4%

9.8%

6.5%

7.6%

8.2%

10.0%

10.4%

10.8%

10.7%

12.8%

15.3%

6.0%

11.6%

4.9%

9.4%

9.9%

9.9%

7.4%

6.5%

2.9%

6.2%

8.2%

8.7%

5.3%

4.4%

3.0%

6.4%

6.9%

4.3%

5.4%

8.9%

4.2%

8.8%

6.5%

3.8%

5.3%

5.5%

3.7%

5.7%

7.2%

7.7%

1.6%

8.1%

Negative equity is worst among bottom-third homes.

Source: Zillow Negative Equity by Tier (2016 Q4)

Negative Equity, by Thirds

Page 56: Housing Market Overview 2017 Q1 · 2019-09-12 · Svenja joined Zillow in 2011 and leads the company’s industry-leading economic research team, a recognized voice of impartial,

ZILLOW HOUSING MARKET OVERVIEW | PAGE 56

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%Share of Foreclosures

UnitedStatesNew York, NY

Los Angeles, CAChicago, IL

Dallas, TXPhiladelphia, PAWashington, DC

Miami, FLAtlanta, GABoston, MA

San Francisco, CADetroit, MI

Riverside, CAPhoenix, AZSeattle, WA

Minneapolis, MNSan Diego, CA

St. Louis, MOTampa, FL

Baltimore, MDDenver, CO

Pittsburgh, PA

60.0

44.0

30.0

40.3

48.4

46.9

20.8

20.8

30.3

34.9

34.6

49.3

46.7

38.4

42.9

39.6

36.8

45.5

38.6

43.235.9

33.8

55.8

56.2

38.3

28.5

55.3

35.2

37.7

37.241.9

14.6

44.1

16.9

16.6

16.6

15.4

41.5

46.1

14.7

13.9

15.6

16.7

51.8

12.9

12.6

45.1

45.1

17.6

18.7

31.5

13.5

31.5

13.3

39.1

31.3

13.751.7

51.7

51.7

12.3

17.3

35.1

57.1

11.5

13.1

Top-Third HomesMiddle-Third HomesBottom-Third Homes

Owners of the least expensive homes were hit hardest by the foreclosure crisis.

Source: Zillow Foreclosure Data (2015)

Foreclosure Thirds

Page 57: Housing Market Overview 2017 Q1 · 2019-09-12 · Svenja joined Zillow in 2011 and leads the company’s industry-leading economic research team, a recognized voice of impartial,

ZILLOW HOUSING MARKET OVERVIEW | PAGE 57

5 10 1500

10

20

30

40

50

60

70

80

Sha

re o

f B

orr

ow

ers

wit

h a

New

Mo

rtg

age

Years After Foreclosure Start

Subprime, 2000–06 foreclosure startPrime, 2000–06 foreclosure start Prime, 2007–10 foreclosure start

Subprime, 2007–10 foreclosure start

Homeownership rates for individuals foreclosed upon during the recession have been slower to recover than for those foreclosed upon before the recession.

Dharmasankar and Mazumder, Federal Reserve Bank of Chicago, 2016

Boomerang Buyers

Page 58: Housing Market Overview 2017 Q1 · 2019-09-12 · Svenja joined Zillow in 2011 and leads the company’s industry-leading economic research team, a recognized voice of impartial,

ZILLOW HOUSING MARKET OVERVIEW | PAGE 58

1967 1972 1977 1982 1987 1992 1997 2002 2007 2012 2017

63.0%

64.0%

65.0%

66.0%

67.0%

68.0%

69.0%

U.S

. Ho

meo

wne

rshi

p R

ate

63.6%

The U.S. homeownership rate is near historic lows.

Source: U.S. Census Bureau Homeownership Rate for the United States (2017 Q1)

U.S. Homeownership Rate

Page 59: Housing Market Overview 2017 Q1 · 2019-09-12 · Svenja joined Zillow in 2011 and leads the company’s industry-leading economic research team, a recognized voice of impartial,

ZILLOW HOUSING MARKET OVERVIEW | PAGE 59

1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

Cum

ulat

ive

Per

cent

Cha

nge

in t

he N

umb

er o

f H

ous

eho

lds

31.7%

24.8%

27.2%

% change total % change owner % change renter

Since 2005, newly formed households have tended to rent.

Source: Zillow analysis of U.S. Census Bureau CPS data 1995-2016, IPUMS

Newly Formed Households

Page 60: Housing Market Overview 2017 Q1 · 2019-09-12 · Svenja joined Zillow in 2011 and leads the company’s industry-leading economic research team, a recognized voice of impartial,

ZILLOW HOUSING MARKET OVERVIEW | PAGE 60

Asian Black Hispanic White0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

Ho

meo

wne

rshi

p R

ate

46.6%

56.8%

42.7%

71.8%

Blacks have the lowest homeownership rate.

Source: U.S. Census Bureau, Housing Vacancies and Homeownership (2017 Q1)

U.S. Homeownership Rate, by Race

Page 61: Housing Market Overview 2017 Q1 · 2019-09-12 · Svenja joined Zillow in 2011 and leads the company’s industry-leading economic research team, a recognized voice of impartial,

ZILLOW HOUSING MARKET OVERVIEW | PAGE 61

Share of Population

Asian Hispanic

Share of Conventional Loan Applications Share of Approved Applications

61.5% 17.6%

12.3%

5.3%3.3%

69.2%

6.2%

3.0%

7.1%

14.6%

71.4%

5.6%2.6%

6.8%

13.5%

Black White Other

Blacks and Hispanics are underrepresented among loan applications and approvals.

Source: Zillow analysis of the U.S. Census Bureau, American Community Survey, 2015 and the Home Mortgage Disclosure Act data, 2015

Loan Applications

Page 62: Housing Market Overview 2017 Q1 · 2019-09-12 · Svenja joined Zillow in 2011 and leads the company’s industry-leading economic research team, a recognized voice of impartial,

ZILLOW HOUSING MARKET OVERVIEW | PAGE 62

Mar 1, 16 May 1, 16 Jul 1, 16 Sep 1, 16 Nov 1, 16 Jan 1, 17 Mar 1, 173.1%

3.2%

3.3%

3.4%

3.5%

3.6%

3.7%

3.8%

3.9%

4.0%

4.1%

4.2%

Pri

me

30-y

ear

Fix

ed M

ort

gag

e R

ate

November 8, 2016U.S. Presidential Election

June 24, 2016Brexit Vote

February 11,2016WTI Crude pricehits 13-year low

May 17, 2016FOMC March meeting minutessuggest higher likelihood ofJune rate increase

April 17, 2016OPEC negotiations tofreeze oil ouput collapse

April 27, 2016FOMC April Statementbackpedals rate hikeexpectations

January 4, 2016Chinese stock market crashes; globalmarkets open year sharply lower

September 21, 2016FOMC decides againstSeptember rate hike

September 28, 2016Yellen testimony to Congressdownplays economic weakness

Mar 15Fed announcesinterest rate hike

March 8, 2017Strong jobs report

Mortgage interest rates spiked at the end of 2016 after staying low for much of the year in the face of global uncertainty.

Source: Freddie Mac: Primary Mortgage Market Survey (March 2017)

The Year in Mortgage Rates: 2016

Page 63: Housing Market Overview 2017 Q1 · 2019-09-12 · Svenja joined Zillow in 2011 and leads the company’s industry-leading economic research team, a recognized voice of impartial,

ZILLOW HOUSING MARKET OVERVIEW | PAGE 63

About Zillow

Zillow® is the leading real estate and rental marketplace dedicated to empowering consumers with data, inspiration and knowledge around the place they call home, and connecting them with the best local professionals who can help. In addition, Zaillow operates an industry-leading economics and analytics bureau led by Zillow’s Chief Economist Dr. Svenja Gudell. Dr. Gudell and her team of economists and data analysts produce extensive housing data and research covering more than 450 markets at Zillow Real Estate Research. Zillow also sponsors the quarterly Zillow Home Price Expectations Survey, which asks more than 100 leading economists, real estate experts and investment and market strategists to predict the path of the Zillow Home Value Index over the next five years. Launched in 2006, Zillow is owned and operated by Zillow Group (NASDAQ: Z and ZG), and headquartered in Seattle.

Zillow is a registered trademark of Zillow, Inc.

Press Contact: [email protected]