may 2016 economic and housing market outlook

8/17/2019 May 2016 Economic and Housing Market Outlook

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LINDA LEE

Chair, Residential Economic

Issues and Trends Forum



CHRISTIAN Z ARIF

Vice Chair, Residential Econom

Issues and Trends Forum



HOUSING AND ECONOMIC OUTLO

L AWRENCE YUN, PH.D.

CHIEF ECONOMIST

NATIONAL ASSOCIATION OF REALTORS®

PRESENTATION IN W ASHINGTON, D.C.

M AY 12, 2016



EXISTING HOME S ALES – MODERATE REC



N ATIONAL PENDING S ALES INDEX – GOOD(SEASONALLY ADJUSTED)

Source: NAR



REGIONAL PENDING CONTRACT(% CHANGE FROM ONE YEAR AGO TO M ARCH)



REGIONAL MEDIAN PRICE CHAN

(3-YEAR PRICE CHANGE FROM 2012 TO 2



HOUSING AFFORDABILITY INCOME AT 3.8% MORTGAGE R ATE



HOUSING AFFORDABILITY INCOME AT 6% MORTGAGE R ATE



VERY CYCLICAL V ACATION HOME S(50% DECLINE AND 100% INCREASE)



NEW HOME S ALES – STILL SUPER(75% DECLINE AND 60% GAIN)



SINGLE-FAMILY HOUSING START

GROSSLY INADEQUATE Thousand units



RISING SHARE OF PRICEY NEW HO



NEW HOME PRICE VS. EXISTING HOME



LOW INVENTORY MONTHS SUP



U.S. POPULATION



EVEN LOWER INVENTORY IN RELATION TO HOUSEHOLDS



MULTIFAMILY HOUSING STARTS

SUFFICIENTLY ADEQUATE



RENTAL V ACANCY R ATE –LOW BUT STABILIZING



BIG DRIVER OF FUTURE INFLATIO

RENTS RISING AT 7-YEAR HIGH

NO CPI INFLATION YET



NO CPI INFLATION – YET,BUT HIGHER FUTURE INFLATION WITH NUDGE

HIGHER



RELIEF ON RENT?

• If higher rent then higher inflation anhigher mortgage rates

• If lower rent than lower inflation andsteady mortgage rates



WIDENING METRO HOME PRICE(640% VS. 241% GROWTH FROM 1980)



S AN FRANCISCO AREA OUTMIGRA

• 47,894 out of SF County• 37,378 out of San Mateo County

• 73,925 out of Santa Clara County

• 71,551 out of Alameda County

• Seattle• Portlan• Boise• Salt La• Denve• Austin• Raleig



WIDENING JOBS MOBILE AND CHARLESTON SC



BOEING AIRPLANE M ADE IN CHARL

WIDENING JOBS



WIDENING JOBS N ASHVILLE AND MEMPHIS

WIDENING JOBS



WIDENING JOBS GRAND R APIDS AND FLINT

JOBS



JOBS (8 MILLION LOST … 14 MILLION GAINED)

In thousands

TOP AND BOTTOM STATES FOR JOBS



TOP AND BOTTOM STATES FOR JOBS

The Best % Gain in 12 months

Idaho 3.8

Utah 3.5

Nevada 3.4

Florida 3.0

Washington 3.0

California 2.9

South Carolina 2.9

Oregon 2.7

Arizona 2.3

The Worst % Gai

Wyoming

Oklahoma

Louisiana

West Virginia

North Dakota



STATE LEVEL EMPLOYMENT



HOME BUYER TRAFFIC



WHO’S ON DECK AFTER PUERTO RStates (worst and best) Unfunded Liability %

Illinois 57%

Kentucky 50%

Connecticut 47%

Louisiana 44%

New Hampshire 43%

Tennessee 8%

North Carolina 5%South Dakota 4%

Washington 2%

Wisconsin 0%



BIGGEST LIES OCCUR …

• After Fishing

• During a War

• Before an Electio

FEDERAL DEBT CUMULATIVE



FEDERAL DEBT … CUMULATIVE ( $ MILLION; DEBT HELD BY PUBLIC EXCLUDING

INTRA-GOVERNMENTAL HOLDINGS)

Q E



QUANTITATIVE E ASING

NEGATIVE INTEREST RATES



NEGATIVE INTEREST R ATES … GOOD-BYE BEN?



HEALTHIER HOMEOWNERS

BORROWERS NOT DEFAULTING – ESPECIALLY VE



BORROWERS NOT DEFAULTING – ESPECIALLY VE(SERIOUS DELINQUENCY R ATE)



RISING HOUSING WEALTH

$ billion

MORTGAGE R ATES S AY TODAY’S HOMEB



ARE LUCKIEST IN A GENERATION %

BUT UNLUCKIEST IN BECOMING HOMEO



BUT UNLUCKIEST IN BECOMING HOMEO

%

STUDENT LOAN …



NAR-ASA STUDY IMPLIES 5 YEAR DELA(IN $BILLION)

HOMEOWNERSHIP PARTICULARLY



HOMEOWNERSHIP P ARTICULARLY FOR MINORITY HOUSEHOLDS

%

HOMEOWNERSHIP PARTICULARLY



HOMEOWNERSHIP P ARTICULARLY FOR MINORITY HOUSEHOLDS

%



TUITION COSTS AT H ARVARD



FORECAST

ECONOMIC FORECAST



ECONOMIC FORECAST

2014 2015 2016

Forecast F

GDP Growth 2.6% 2.1% 1.6%

Job Growth +3.0 million +2.6 million +1.6 million +2

CPI Inflation 1.6% 0.3% 1.7%

10-year Treasury 2.6% 2.1% 2.1%

HOUSING FORECAST



2014 2015 2016

Forecast

New Home Sales 437,000 500,000 540,000

Existing Home Sales 4.9 million 5.3 million 5.4 million

Median Price

Growth

+ 5.7% + 6.8% +4.5%

30-year Rate 4.2% 3.9% 3.9%

REALTOR® MEMBERSHIP



REALTOR MEMBERSHIP



2016 PRESIDENTIAL ELECTION

STRONG FEELINGS, FOR AND AGA

POLLS: PEOPLE DO NOT LIKE TRUMP OR C



POLLS: PEOPLE DO NOT LIKE TRUMP OR CS AY NO TO DEMOCRACY AND

YES TO PRIVATE PROPERTY RIGHTS

Singapore-

– Had no Democracy

– Higher per capita income than U.S.

– Futuristic city

– English: official language

– Strong private property rights protection

REALTORS® BELIEVE IN



DEMOCRACY AND PROPERTY RIG



THE HONORABLE ELIZABETH W AR

Senator, (D – Massachusetts)

may 2016 economic and housing market outlook

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