The 2017 Housing & Economic Outlook Frank E. Nothaft, CoreLogic SVP & Chief Economist @DrFrankNothaft @CoreLogicEcon The views, opinions, forecasts and estimates herein are those of the CoreLogic Office of the Chief Economist, are subject to change without notice and do not necessarily reflect the position of CoreLogic or its management. The Office of the Chief Economist makes every effort to provide accurate and reliable information, however, it does not guarantee accuracy , completeness, timeliness or suitability for any particular purpose. CORELOGIC and the CoreLogic logo are trademarks of CoreLogic, Inc. and/or its subsidiaries.
Household Mobility & Mortgage Market Trends Household Trends: – Millenniums have added to housing need: renters today, owners tomorrow – Homeowners (primarily Baby Boomers) are staying in their homes longer – Interstate buyers driven by affordability, jobs, weather Mortgage Trends: – Home-price growth & lessened mobility prompts more home-improvement – High LTV & debt-to-income products are in market, but need good credit – While overall credit risk remains low, fraud risk increases
Large Demographic Tailwind Has Arrived Population Largest Age in 2015 Cohort (Millions) 4.8 Average Age First-time 4.6 Homebuyer 4.4 Average Age Repeat Buyer 4.2 4 3.8 3.6 3.4 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Age in 2015 Source: U.S. Census Bureau, Population as of July 1, 2015
Millennial Share of Buyers Lower in Expensive Markets Share of Purchase-Money Applicants Aged Under 30 20% 16% 12% 8% 4% Source: CoreLogic (purchase loan applications, Jan-Oct 2016)
Americans Are Keeping Their Homes Longer Number of Years A Home Is Owned (Median) 14 Owner 12 Occupants 10 Home Sellers 8 6 4 2 1985 1990 1995 2000 2005 2010 2015 Source: American Housing Survey for the United States, various years (difference between survey year and median year owner-occupant moved into unit), CoreLogic public records for United States (length of time between recorded sales on same home).
Interstate Buyers Seek Affordability, Jobs and Warmth All Ages NY , NJ NC, FL CA, CO VA, FL States in CA, CO Green are Top CA, FL 2 Sources CA, TX CA, OR States in Red NY , PA are Top 2 FL, KY Destinations VA, FL NJ, FL MD, FL FL, IN TX, NV Source: CoreLogic NJ, FL (purchase loan 4 3 2 1 1 3 4 2 applications, Jan-Oct 2016) Ratio of Buyers Moving Out to Moving In Ratio of Buyers Moving In to Moving Out
Millennials: Affordability & Jobs Baby Boomers: Affordability & Warmth Ages 25-34 Ages 55 and Older NY NY NC NC State in Green CA GA is Top Source VA FL CA CA FL AZ NY CA State in Red is AZ OR FL NY Top Destination FL KY FL VA NJ NJ FL MD FL IN AZ TX FL NJ Source: CoreLogic (purchase loan applications, Jan-Oct 2016)
New-Home Sales Levels Highest in the South New Home Sale Share Monthly Number of New Sales (Average) 0 500 1,000 1,500 2,000 0% 5% 10% 15% 20% 25% Houston TX Raleigh NC Dallas TX Austin TX Atlanta GA Charleston SC Phoenix AZ San Antonio TX Austin TX Provo UT Based on Charlotte NC Houston TX the Top 100 Washington DC Columbia SC Metros for San Antonio TX Dallas TX Home Sales Orlando FL Charlotte NC Tampa FL Jacksonville FL Denver CO Naples FL Nashville TN Lakeland FL Riverside CA Baton Rouge LA New York NY Boise ID Raleigh NC Nashville TN Las Vegas NV Orlando FL Jacksonville FL Las Vegas NV Source: CoreLogic. Left: average monthly new homes sold Oct 2015 to Sept 2016; Right: new-home share of sales Oct 2015 to Sept 2016; top 100 CBSAs based on new and existing home sales.
Highest Growth New-Home Markets (top 100 metros) Highest Growth New-Home Metros 0% 5% 10% 15% 20% 25% 30% Boise ID Port St. Lucie FL Metros with: Sacramento CA Daphne AL • good affordability , Anaheim CA Salt Lake City UT Colorado Springs CO • good job growth, Phoenix AZ Knoxville TN • good weather Des Moines IA San Diego CA Dallas TX have had the highest Atlanta GA growth in new-home Portland OR Greeley CO sales over the last year Pensacola FL Tampa FL Deltona FL Nashville TN Source: CoreLogic, percent change, number of new-home sales Oct 2015-to-Sept Tucson AZ 2016 vs. Oct 2014-to-Sept 2015, based on 100 largest metros for new home sales.
U.S. Home Prices: Price to Moderate to 4.7% in 2017 CoreLogic Home Price Index (January 2000 = 100) 220 - Forecast - 200 5% 180 160 43% 140 120 100 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 Source: CoreLogic Home Price Index (December 6, 2016 release)
HELOC Volume Up in 2016 Approved HELOCs (Billions of Dollars) $400 $350 $300 $250 $200 $150 $100 $50 $0 2000 2004 2008 2012 2016 (Through September, Annualized) Source: CoreLogic public records, second-lien HELOCs placed more than 60 days after first lien.
2016 Loans Have Less Credit Risk Than Pre-2009 Loans CoreLogic Housing Credit Index (2001 = 100) More Risk 140 120 100 2001-03 2001-2003 mean +1 s.d. Benchmark 80 60 Less Risk 40 20 0 2001 2003 2006 2008 2011 2013 2016 Source: CoreLogic Housing Credit Index (through 2016Q3) 36
Mortgage Credit Risk Along Six Dimensions First-Lien Home Purchase Originations Credit Score 150 Less Than 640 125 Low & No L TV Share 95 100 Doc Share And Above 75 50 25 0 DTI Share 43 And Above Condo Co-op Share Benchmark (2001 and 2002 Originations) Current (2016:Q3) Non-Owner Source: CoreLogic Housing Credit Index 37 Occupancy Share
Beginning 2009, Excellent Loan Performance Serious Delinquency Rate by Origination Cohort 1999-2003 2004-2008 2009-2014 Source: CoreLogic: March 2016 38
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