JANUARY 2020

“Markets sounded the recession alarm this year, and the average forecaster now sees a 33% chance of recession over the next year. In contrast, our new recession model suggests just a 20% probability. Despite the record age of the expansion, the usual late-cycle problems—inflationary overheating and financial imbalances—do not look threatening. ”

Goldman Sachs’ 2020 US Outlook

“Housing remains a solid foundation for the U.S. economy going into 2020.”

- George Ratiu, Senior Economist at Realtor.com

6,040 6,039 6,029 6,0006,083

6,264

6,1436,200

NAR MBA Fannie Mae Freddie Mac

2019 2020

Home Sales Are Projected to Grow in 2020

“We expect mortgage rates to remain low over the next two years, averaging 3.8% in 2020 and 2021.” – Freddie Mac

3.7% 3.8% 3.6% 3.7% 3.8%

2019** Freddie Mac Fannie Mae MBA NAR

*Projected rate for 4th quarter of 2020 **Latest Freddie Mac rate

30 Year Mortgage Rate* Projected to Remain Stable throughout 2020

The Biggest Issue the Housing Market Will Face in 2020:

Inventory Shortage

“In 2020, we expect inventory

to struggle to grow and could instead reach a

historic low level.”

- realtor.com

4 months 3.9 months3.7 months

Last Year Last Month Today

Months Supply of Unsold Inventory Is

DECREASING

NAR

“We now expect single-family housing starts and sales of new homes to increase substantially, aided by a large uptick in new construction as builders work to replenish inventories drawn down by the recent surge in new home sales activity.”

Doug DuncanChief Economist at Fannie Mae

“Despite improvements to new construction and short waves of sellers, next year will once again fail to bring a solution to the inventory shortage.”

George Ratiurealtor.com Senior Economist

“As millennials embrace homeownership and take advantage of this year's unexpectedly low mortgage rates, demand is outstripping supply, causing inventory to vanish. …The issue is further compounded by the fact that sellers tend to be more reluctant to list during the colder time of year when the market typically makes a seasonal slowdown.”

George Ratiurealtor.com Senior Economist

George Ratiurealtor.com Senior Economist

“As shoppers modify their strategies for navigating a housing market that has become more competitive due to rising prices & low inventory, the search for a home is beginning earlier & earlier. With housing inventory across the U.S. expected to reach record lows in 2020, we expect to see this trend continue into the new year.”

move.com

People have begun their home search earlier each year since 2015

January 2019 fell just one percent behind February for highest number of views per listing

In 20% of the large markets, January saw the highest number of listing views in 2019

ShowingTime’s latest report shows another INCREASE in buyer traffic…

“The nation’s 12.6% growth in home showings compared to 2018 was the most significant

jump in buyer traffic during the current four-month streak of year-over-year increases. The West Region saw the greatest

growth in activity, with a 23.1% jump – the region’s greatest in

the history of the Showing Index.”

23.1%

15.4%

13%

7.1%

West South Northeast Midwest

ShowingTime

Every region saw an annual increase

“We expect home prices to rise at least another 5% over

the next 12 months.”

Frank MartellPresident and CEO

of CoreLogic

3.5%

5.4%

4.1%3.9%

3.6%

2.8%3.1%

2019* CoreLogic Fannie Mae Z' Report NAR Freddie Mac MBA

* Latest CoreLogic Home Price Index

Home Values Are Projectedto Continue to Appreciate

through 2020

2.8

2.32.6

2.9

3.4

2020 2021 2022 2023 2024

Projected Mean Percentage Appreciation will drop initially and then grow for the next few years

Home Price Expectation Survey 2019 4Q

$250,000

$266,500

$272,500

$279,500

$287,750

$297,500

January 2020 January 2021 January 2022 January 2023 January 2024 January 2025

$47,500

Increased home equity based on price appreciation projected by the Home Price Expectation Survey

potential growth in family wealth over the next five years based solely on increased home equity

Home Price Expectation Survey 2019 4Q

In the last 12 Months, 44 States had an increase in Home Equity.

Only one had a decrease.

CoreLogic

Mark FlemingFirst American Chief Economist

“As homeowners gain equity in their homes, they are more likely to consider using the equity to purchase a larger or more attractive home.”

$210,000

$278,900 $295,000

$320,000 $348,700

$325,000

18 to 34 Years 35 to 44 Years 45 to 54 Years

Price of Home Sold Price of Home Purchased

NAR

Price of Home Purchased Is Greater than Home Recently Sold

ResourcesSlide Slide Title Link

3 Goldman Sachs’ Quote https://www.goldmansachs.com/insights/pages/outlook-2020-f/US/report.pdf

4 George Ratiu Quote (Housing) https://news.move.com/2019-12-04-Home-Sellers-Will-Remain-on-the-Sidelines-in-2020

5Home Sales Are Projected to Grow in 2020

www.fanniemae.com, www.freddiemac.com, www.nar.realtor, and www.mba.org

6 Freddie Mac Quotehttps://www.cnbc.com/amp/2019/12/18/fannie-mae-boosts-2020-housing-forecast-significantly.html

7 30 Year Mortgage Rate Projections www.fanniemae.com, www.freddiemac.com, www.nar.realtor, and www.mba.org

9 Realtor.com Quotehttps://www.realtor.com/news/trends/biggest-changes-coming-in-2020-real-estate-and-tips-for-buyers-and-sellers.amp/

10 Months Supply Decreasing https://www.nar.realtor/newsroom/existing-home-sales-descend-1-7-in-November

11 Doug Duncan Quotehttps://www.cnbc.com/amp/2019/12/18/fannie-mae-boosts-2020-housing-forecast-significantly.html

12 George Ratiu Quote (Inventory)https://www.forbes.com/sites/alyyale/2019/12/05/2020-will-see-historic-low-level-of-housing-inventory/#3465bda53d7f

13 George Ratiu Quote (Millennials)https://news.move.com/2019-12-09-Curious-Case-A-U-S-Housing-Market-No-One-Saw-Coming

14 George Ratiu Quote (Home Search) https://news.move.com/2019-12-18-Could-January-be-the-New-April-for-Home-Shopping

15 January’s Home Search https://news.move.com/2019-12-18-Could-January-be-the-New-April-for-Home-Shopping

Slide Slide Title Link

16 Buyer Traffic https://www.showingtime.com/blog/november-2019-showing-index-results/

17 Frank Martell Quote https://www.showingtime.com/blog/november-2019-showing-index-results/

18 Home Values Are Projected

www.corelogic.comwww.fanniemae.comzelmanandassociates.com (paid subscription)www.nar.realtorwww.freddiemac.comwww.mba.org

19, 20Projected Mean Percentage Appreciation and Potential Growth in Family Wealth

https://pulsenomics.com/surveys/#home-price-expectations

21 Increase in Home Equity https://www.corelogic.com/insights-download/homeowner-equity-report.aspx

23 Mark Fleming Quote https://blog.firstam.com/economics/will-housing-market-potential-in-2020-exceed-2019

24Difference Price of Home Purchased Vs Home Sold

https://www.nar.realtor/research-and-statistics/research-reports/highlights-from-the-profile-of-home-buyers-and-sellers

29 Create Videos https://www.keepingcurrentmatters.com/article/how-to-overcome-your-fear-of-video/

Resources

Make Your Business Your Top Priority

in 2020

Own Your Business Plan• Have a plan and stick

to it. Consistency is key.

• Time block your daily schedule.

• Commit to regular lead generation and follow-up.

• Engage in your community.

Video, Video, Video!• Don’t be camera shy.

You’ve got this.

• More is more. Stick with it.

• Post consistently to social media.

Become a Market Expert• Read and share your

personalized posts.

• Pair with your local data, offering the full picture your clients need to know.

• Watch the Monthly Market Reports.

• Print, email, and share the Seasonal Buyer & Seller Guides.

2020 is poised to be a great year for the real estate market.

ResourcesSlide Slide Title Link

36, 56, 68

Confidence Indexhttps://www.nar.realtor/research-and-statistics/research-reports/realtors-confidence-index

37-39,47, 49,50

Existing Home Sales https://www.nar.realtor/topics/existing-home-sales

40-43 New Home Saleshttp://www.census.gov/construction/nrs/pdf/newressales.pdfhttp://www.census.gov/newhomesaleshttp://www.census.gov/construction/nrs/pdf/newressales.pdf

44 Total Home Saleshttp://www.census.gov/construction/nrs/pdf/newressales.pdfhttps://www.nar.realtor/topics/existing-home-sales

45,46 Pending Home Saleshttps://www.nar.realtor/research-and-statistics/housing-statistics/pending-home-sales

51-53 Case Shillerhttp://us.spindices.com/indices/real-estate/sp-case-shiller-20-city-composite-home-price-index

54CoreLogic Forecasted YOY % Change in Price

https://www.corelogic.com/downloadable-docs/marketpulse/the-marketpulse-vol-8-issue-11-november-2019-screen-112519.pdf

57-63 Inventoryhttps://www.nar.realtor/topics/existing-home-saleshttp://www.census.gov/construction/nrs/pdf/newressales.pdf

Slide Slide Title Link

65 -67 Foot Traffic http://nar.realtor/infographics/foot-traffic

70, 71, 73, 74

Mortgage Rateshttp://www.freddiemac.com/pmms/pmms_archives.htmlhttp://www.freddiemac.com/research/forecast/20191220_optimism_heading_into_2020.page?

72 Mortgage Rate Projections

http://www.freddiemac.com/research/forecast/http://www.fanniemae.com/portal/research-insights/forecast.htmlhttps://www.mba.org/news-research-and-resources/research-and-economics/forecasts-and-commentaryhttps://www.nar.realtor/research-and-statistics

76, 77 Mortgage Credit Availabilityhttps://www.mba.org/news-research-and-resources/newsroomhttps://www.mba.org/news-research-and-resources/research-and-economics/single-family-research/mortgage-credit-availability-index

78-82Days To Close, FICO Scores, DTI

http://www.elliemae.com/resources/origination-insight-reportshttps://static.elliemae.com/pdf/origination-insight-reports/EM_OIR_NOVEMBER2019.pdf

Resources

Average Days on the Market

Jan 2014 Jan 2015 Jan 2016 Jan 2017 Jan 2018 Jan 2019

Since January 2014

EXISTINGHome Sales

NAR

3.5%

-1.7%

2.5%

4.2%

6.6%

U.S. Midwest South West

Y-O-Y by regionEXISTING Home Sales

NAR

Northeast

Existing Home Sales in thousands

Census & NAR

January February March April May June July August September October November December

2017 2018 2019

Census & NAR

January February March April May June July August September October November December

2017 2018 2019

New Home Sales in thousands

Jun-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19

Census

New Home Salesannualized in thousands

1% 4%

16%

13%

8% 8%

3%

Under $150K $150-$199K $200-299K $300-$399K $400-$499K $500-$749K Over $750K

New Home Sales% of sales by price range

Census

3.4

3.23.3

3.7

3.93.8

3.7

3.3

3.1

2.9 2.9

2.7

3.0

3.2 3.2

3.6 3.6

3.43.5

3.6

3.4

3.2

3.5

3.23.1

New Homes Selling Fast(median months from completion to sold)

Census

Census & NAR

361 373

500521

597626

575 586

467489

450

415

334

368

468

520

598 594 595 589

506 517

456

January February March April May June July August September October November December

2018 2019

Total Home Sales in thousands

January 2014 January 2015 January 2016 January 2017 January 2018 January 2019

100 = Historically Healthy Level

PENDING Home Salessince 2014

NAR

Pending Home SalesYear-Over-Year By Region

NAR

Northeast

South

7.4%

2.6%

5.0%

7.7%

14.0%

U.S Northeast Midwest South West

Jan2012

Jan2013

Jan2014

Jan2015

Jan2016

Jan2017

Jan2018

Jan2019

Percentage ofDistressed Property Sales

35%

January 2012 - Today 2%

4%

NAR

Home Prices

5.4%

3.4%

5.9%

5.0%

7.1%

U.S. Northeast Midwest South West

Y-O-Y by region

EXISTING Home Prices

NAR

-15.9%

-3.5%

7.5% 8.0%

2.9%1.4%

$0-100K $100-250K $250-500K $500-750K $750K-1M $1M+

% -15.9% -3.5% 7.5% 8.0% 2.9% 1.4%

% Change in Salesfrom last year by Price Range

NAR

Year-Over-Year

PRICECHANGES

Case Shiller

S&P Case Shiller

Jun 2012 Jan 2013 Jan 2014 Jan 2015 Jan 2016 Jan 2017 Jan 2018 Jan 2019

Jan

20

14

Feb

Mar

Ap

r

May Jun

Jul

Au

g

Sep

t

Oct

No

v

De

c

Jan

20

15

Feb

Mar

Ap

r

May Jun

Jul

Au

g

Sep

t

Oct

No

v

De

c

Jan

20

16

Feb

Mar

Ap

r

May Jun

Jul

Au

g

Sep

t

Oct

No

v

De

c

Jan

20

17

Feb

Mar

Ap

r

May Jun

Jul

Au

g

Sep

t

Oct

No

v

De

c

Jan

20

18

Feb

Mar

Ap

r

May Jun

Jul

Au

g

Sep

t

Oct

No

v

De

c

Jan

20

19

Feb

Mar

Ap

r

May Jun

Jul

Au

g

Sep

t

Oct

S&P Case Shiller

Year-Over-Year PRICE CHANGES20 City Composite

Case Shiller

4.6%

4.2%

3.5%

3.0%

2.6% 2.5% 2.4%2.2%

2.0% 2.0% 2.1% 2.2%

Nov Dec Jan 2019 Feb Mar Apr May Jun Jul Aug Sept Oct

Year-Over-Year PRICE CHANGES20 City Composite

Case Shiller

S&P Case Shiller

Forecasted Year-Over-Year % Change in Price

CoreLogic

HOUSINGINVENTORY

Seller Traffic

January2011

January2012

January2013

January2014

January2015

January2016

January2017

January2018

January2019

Months Inventory ofHOMES FOR SALE

2011 - Today

NAR

Oct Nov Dec Jan-18 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan-19 Feb Mar Apr May June July Aug Sept Oct Nov

Months Inventory of HOMES FOR SALE

last 2 years

NAR

3.7

3.9

3.5

3.8

4.2

4.3 4.3

4.1

3.9

4.0

3.9

3.7

Dec Jan Feb Mar Apr May June July Ago Sep Oct Nov

Months Inventory of HOMES FOR SALELast 12 Months

NAR

January 2014 January 2015 January 2016 January 2017 January 2018 January 2019

% 7. 5. 3. 6. 6. 5. 5. 4. 6. 5. 5. -0 -0 -0 2. -0 1. 0. -4 -1 -3 -4 -1 -3 -2 -1 -1 -3 -9 -5 -5 -1 -6 -1 -9 -6 -7 -6 -6 -9 -8 -7 -9 -6 -6 -1 -9 -1 -9 -8 -7 -6 -6 0. 0. 2. 1. 2. 4. 6. 4. 2. 2. 1. 2. 0. -1 -2 -2 -4 -5

Year-over-Year Inventory Levels

NAR

HOUSING SUPPLY Year-Over-Year

6.2%

4.6%

2.9%2.4%

1.7%

2.7%

0.0%

-1.6%

-2.6% -2.7%

-4.3%

-5.2%

Dec Jan Feb Mar Apr May June Jul Aug Sep Oct Nov

Last 12 Months

JunDec Jan Feb Mar Apr May

NAR

5.65.4

5.3

5.75.6

6.06.2

6.36.4

7.2

6.5

7.4

6.5

6.1

5.8

6.1

6.7

5.4

6

5.55.3

5.55.4

Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec

2018 2019

New Home Inventorymonths supply

Census

7.4

6.5

6.1

5.8

6.1

6.7

5.4

6.0

5.55.3

5.5 5.4

Dec Jan-19 Feb Mar Apr May Jun Jul Aug Sep Oct Nov

New Home Inventory Last 12 Months

Census

months supply

BUYERDEMAND

Jul 2013 Jan 2014 Jan 2015 Jan 2016 Jan 2017 Jan 2018 Jan 2019

Foot Trafficindicator of future sales

NAR

Dec Jan Feb Mar Apr May June July Aug Sep Oct Nov

Foot Trafficindicator of future sales

Last 12 Months

NAR

January February March April May June July August September October November December

2018

2019

Foot Trafficindicator of future sales

NAR

Buyer Traffic

INTERESTRATES

2/1 3/1 4/5 5/3 6/7 7/5 8/2 9/6 10/4 11/1 12/6 1/3 1/31 3/7 4/4 5/2 6/6 7/3 8/1 9/5 10/3 11/7 12/5 1/2Freddie Mac

Mortgage RatesFreddie Mac 30-Year Fixed Rate

3.95%

3.72%

1/7/

16 2/4

3/3

4/7

5/5

6/2

7/7

8/4

9/1

10/6

11/3

12/1

1/5/

20…

2/2

3/2

3/30

4/27

5/25

6/22

7/20

8/17

9/14

10/1

211

/912

/71/

4/20

…2/

13/

1

4/5

5/4

6/7

7/5

8/2

9/6

10/4

11/1

12/6 1/3

1/31 3/

74/

45/

2

6/6

7/3

8/1

9/5

10/3

11/7

12/5 1/2

30-Year FixedRate Mortgages

from Freddie Mac

3.97

Freddie Mac

3.72%

Mortgage Rate Projections

QuarterFreddie

MacFannie Mae

MBA NARAverage

of All Four

2020 1Q 3.8 3.7 3.7 3.8 3.75%

2020 2Q 3.8 3.6 3.7 3.8 3.72%

2020 3Q 3.8 3.6 3.7 3.8 3.72%

2020 4Q 3.8 3.6 3.7 3.8 3.72%

2016Q1

2016Q2

2016Q3

2016Q4

2017Q1

2017Q2

2017Q3

2017Q4

2018Q1

2018Q2

2018Q3

2018Q4

2019Q1

2019Q2

2019Q3

2019Q4

2020Q1

2020Q2

2020Q3

2020Q4

Rate 3.7 3.6 3.5 3.8 4.2 4.0 3.9 3.9 4.3 4.5 4.6 4.8 4.4 4 3.7 3.7 3.8 3.8 3.8 3.8

Freddie Mac

Mortgage RatesFreddie Mac 30-Year Fixed Rate

- Actual- Projected

2016

2017 20182019

2020

3.8 3.8 3.8 3.8

2020 Q1 2020 Q2 2020 Q3 2020 Q4Freddie Mac

January 2018 – Today Actual Interest Rates

Mortgage RatesFreddie Mac

30-Year Fixed Rate

2020

Q2 Q3 Q4

Where Are They Going?

Q1

Mortgage Credit Availability

YES NO MAYBE

Apr2013

Jan2014

Jan2015

Jan2016

Jan2017

Jan2018

Jan2019 MBA

Mortgage Credit Availability Index (MCAI), a report from the Mortgage Bankers Association

Mortgage Credit Availability

0

100

200

300

400

500

600

700

800

900

June 2004 June 2006 June 2008 June 2010 June 2012 June 2014 June 2016 June 2018 November 2019

Historic Data for the MORTGAGE CREDIT AVAILABILITY INDEX

(a report from the Mortgage Bankers Association)

MBA

47

49

47

45

43

44

45

43

45

46

47 47

Dec Jan Feb Mar Apr May June July Aug Sep Oct Nov

Average Days To Close A Loan

All Closed Loans as per Ellie Mae

Last 12 Months

726724

726 726728 728

731 731

734

737 737 736

Dec Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov

All Closed Loans as per Ellie Mae

FICO® Score RequirementsLast 12 months

0.04% 0.65%

8.45%

17.85%

23.63%

35.34%

14.03%

500-549 550-599 600-649 650-699 700-749 750-799 800+

FICO® Score Distribution

50.62% All Closed Loans as per Ellie Mae

Average FICO® Scorefor Closed Purchase Loans

by Loan Type

All Closed Loans as per Ellie Mae

736 755

679

712

All Loans Conventional FHA VA

37 36

43 41

All Loans* Conventional FHA VA

Average Back End DTIfor Closed Purchase Loans by Loan Type

All Closed Loans as per Ellie Mae