AEI.org/housing | May 2019 Update on Housing and Mortgage Markets Lynn M. Fisher Resident Scholar and Center Co-director Lynn.Fisher@aei.org MEREDA Spring Conference - May 7, 2019
Home Sales Slowed in 2018 US Agency Purchase Originations Maine Agency Purchase Originations 400,000 1,400 350,000 1,200 300,000 1,000 250,000 800 200,000 600 150,000 400 100,000 200 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2013 2014 2015 2016 2013 2014 2015 2016 2017 2018 2019 2017 2018 2019 2 Source: AEI Housing Center, www.AEI.org/housing
Home Sales Slowed in 2018 US Agency Purchase Originations Maine Agency Purchase Originations 400,000 1,400 350,000 1,200 300,000 1,000 250,000 800 200,000 600 150,000 400 100,000 200 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2013 2014 2015 2016 2013 2014 2015 2016 2017 2018 2019 2017 2018 2019 3 Source: AEI Housing Center, www.AEI.org/housing
But Prices Still Rising for All But Highest Priced Homes Home Price Appreciation by Price Tier Index: Jan-2012 = 100 160 150 140 130 120 Low 110 Low-Med Med-High 100 High 90 Preliminary results for March 2019 4 Source: AEI Housing Center, www.AEI.org/housing.
Seeking to Overcome Affordability Problems, First-time Buyers (FTBs) Are Taking on More Risk Stressed default rate Mortgage Risk Index 18% 18% Higher Mortgage Risk First-time buyers Index for FTBs primarily driven by: 16% 16% o lower credit scores, 14% 14% o lower levels of down payment, 12% 12% o higher debt-to-income ratios, or Repeat buyers 10% 10% o a combination of the above 8% 8% Feb-13 Feb-14 Feb-15 Feb-16 Feb-17 Feb-18 Note: Data are for primary owner-occupied agency purchase loans. 5 Source: AEI Housing Center, www.AEI.org/housing.
Single Family Starts Lagging Single Family Housing Starts and Real House Prices 2000 15.0 1800 10.0 1600 5.0 1400 1200 0.0 1000 -5.0 800 600 -10.0 400 -15.0 200 0 -20.0 SF Housing Starts (thous. of units, SA, left axis) Real House Prices (% chng from year ago, right axis) 6 Source: Census, Shiller (2015), BLS
New Homes Tend to be Higher Priced Maine New Construction Share of All Sales 22% 20% 18% 16% About half the rate observed for the US overall 14% 12% 9% 9% 10% 8% 8% 5% 6% 5% 5% 4% 4% 3% 4% 2% 1% 2% 1% 0% 2013 2015 2018 2013 2015 2018 2013 2015 2018 2013 2015 2018 Low Low-Med Med-High All 42%* 34%* 24%* *Share of institutionally financed sales in 2018 by tier. The high price tier only represents 1% of ME home sales and is omitted. 7 Source: AEI Housing Center, www.AEI.org/housing.
Modest Maine Household Growth Change in Number of Households, by Age, 2008-2018 30000 25000 20000 15000 10000 5000 0 -5000 -10000 -15000 18-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75-79 80+ Age White Black Asian Other Hispanic 8 Source: Presenter’s calculations using IPUMS-CPS, University of Minnesota, www.ipums.org.
Maine Employment Growth Lagging US Source: BEA and presenter’s calculations 9
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