Housing Finance Policy Center Lunchtime Data Talk Housing Data: Home Sales, Affordability, and Realtor/Builder Activity Lawrence Yun, National Association of Realtors David Crowe, National Association of Home Builders December 9, 2013
NAR Housing Data Existing Home Sales Lawrence Yun, Ph.D. Chief Economist NATIONAL ASSOCIATION OF REALTORS Presentation at the Urban Institute Washington, D.C. December 9, 2013 2
NAR Data Existing Home Sales 3
8,000,000 Existing Home Sales 20% cumulative increase over 2 years 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 4
Median Home Price $240,000 $220,000 $200,000 $180,000 $160,000 $140,000 $120,000 $100,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 5
Pending Sales (Contracts, not Closings) 130 120 110 100 90 80 70 2001 - Jan 2002 - Jan 2003 - Jan 2004 - Jan 2005 - Jan 2006 - Jan 2007 - Jan 2008 - Jan 2009 - Jan 2010 - Jan 2011 - Jan 2012 - Jan 2013 - Jan Source: NAR 6
Data Collection Multiple Listing Service reporting by summary (form) Electronic Connection to Individual Multiple Listing Service State Association Aggregators Across MLSs in the state One state-association MLS 7
Multiple Listing Services Multiple listing services enable brokers to cooperate and make the real estate transaction more efficient There are over 900 multiple listing services in the US Monthly Panel About 200 boards are selected to participate in the panel upon which monthly home sales estimate is based Boards are selected for representativeness and reliability 8
Existing Home Sales Overview Quarterly data Single Family Median Prices by Metropolitan Statistical Area (MSA) for approximately 150 MSAs Condominium Median Prices by Metropolitan Statistical Area (MSA) for approximately 60 MSAs Metro-level Affordability Index Qualifying Income by MSA Affordability Index by MSA 9
Pending Home Sales Pending sales are those identified by MLSs as pending, typically under contract Total pending counts in the MLS or Newly pending that occurred during the month Pending home sales data is reported as an index 10
Periodic Revisions Validate private industry source with other outside, preferably with public data Changes to For-Sale-By-Owner home sales Flipping of a home (re-sell within 12 months) Re-benchmarked figure excludes the second sale, while they are counted as twice in MLS count Enlarged MLS geographic coverage Some of the home sales are not an increase in home sales but are just due to enlarged sampled areas 11
1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Last Revision 8000 Annual Figures Old and New 7000 6000 5000 4000 3000 old new 2000 1000 0 12
What was Revised? No Revision to Median Home Price No Revision to Months Supply of Inventory Downward Revision to Home Sales Downward Revision to Inventory No Changes to Reported Financial Statements by Brokerages No Changes to Homeownership Rate No Changes to Local MLS data on Sales and Prices No Changes to Mortgage Default and Foreclosure No Changes to Underwater Status 13
Home Sellers and Their Experience Exhibit 6-27 METHOD USED TO SELL HOME, 2001-2011 (Percentage Distribution) 2001 2003 2004 2005 2006 2007 2008 2009 2010 2011 Sold home using an agent or broker 79% 83% 82% 85% 84% 85% 84% 85% 88% 87% For-sale-by-owner (FSBO) 13 14 14 13 12 12 13 11 9 10 Sold to home buying company 1 1 1 1 1 1 1 1 1 1 Other 7 3 3 2 3 2 2 3 3 2 Source: NAR Home Buyer and Seller Survey 14
Future Rebenchmark Plans Rebenchmark as better source of data becomes more readily available or due to notable data drift Courthouse Data LPS, CoreLogic, DataQuick Realtor Property Resource (RPR) Utilizing detailed property level data of both deeds records and MLS information as potential future source Exploring the Development of Repeat-Price Index using Timely MLS data 15
Home Builder Data Urban Institute December 9, 2013 David Crowe Chief Economist 16
New Home Sales 17
New Home Sales Collected by Census Bureau, funded by HUD Released roughly 17 th working day of month Sample is roughly1 in 50 new homes From list of building permits and canvassing in non-permit areas (<2%) Four types (only 1 st is included): houses built for sale (whether sold or not) where the house and land are sold as a package contractor-built houses where the owner of the land hires a general contractor to build the house owner-built houses where the owner of the land builds the house him/herself or acts as the general contractor houses built for rent Each month also includes revisions to previous 3 months Each April revisions to 27 months SA data Signed contract moment (similar to NAR pending home sale) 18
19 New Home Sales History (000s) 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 0 200 400 600 800 1,000 1,200 1,400 Jan-63 Dec-64 Nov-66 Oct-68 Sep-70 Aug-72 Jul-74 Jun-76 May-78 Apr-80 Mar-82 Feb-84 Jan-86 Dec-87 Nov-89 Oct-91 Sep-93 Aug-95 Jul-97 Jun-99 May-01 Apr-03 Mar-05 Feb-07 Jan-09 Dec-10 Nov-12
New Home Sales Confidence Interval July to August 2013 60% 68% 56% 40% 44% 20% 0% -20% 23% 8% 9% -7% 20% -28% 15% -14% 16% -15% -40% -38% US NE MW SO WE -45% 20
Jan-68 Nov-69 Sep-71 Jul-73 May-75 Mar-77 Jan-79 Nov-80 Sep-82 Jul-84 May-86 Mar-88 Jan-90 Nov-91 Sep-93 Jul-95 May-97 Mar-99 Jan-01 Nov-02 Sep-04 Jul-06 May-08 Mar-10 Jan-12 Home Sales (000s) 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 1,600 1,400 1,200 1,000 800 600 400 200 0 Existing Home Sales (L) New Home Sales (R) 21
Jan '85 Dec Nov Oct Sep Aug Jul Jun May Apr Mar Feb Jan '96 Dec Nov Oct Sep Aug Jul Jun May Apr Mar Feb Jan '07 Dec Nov Oct Sep Aug Jul Jun New Home Sales and NAHB HMI 1,600 1,400 1,200 1,000 800 600 400 200 0 (000s) 100 90 80 70 60 50 40 30 20 10 0 New Home Sales (L) HMI Expected Sales (R) 22
Housing Opportunity Index 23
NAHB/Wells Fargo Housing Opportunity Index The share of homes recently sold affordable to median income Affordability for 250+ MSAs Quarterly since 1991 Recent sales from CoreLogic Income from HUD Interest rate fro FHFA 30 year fixed rate mortgage, 28% of income to PITI, 10% down payment, local taxes and insurance from ACS www.nahb.org/hoi 24
Q192 Q393 Q195 Q396 Q198 Q399 Q101 Q104 Q305 Q107 Q308 Q110 Q311 Q113 NAHB/Wells Fargo Housing Opportunity Index 80 75 78 70 65 60 65 55 50 45 40 40 25
Large Metro Ranks 10 Most Affordable Metro Areas 10 Least Affordable Metro Areas 1 Indianapolis-Carmel, IN 1 San Francisco-San Mateo-Redwood City, CA ^^^ 1 Syracuse, NY 2 Los Angeles-Long Beach-Glendale, CA ^^^ 3 Youngstown-Warren-Boardman, OH-PA 3 Santa Ana-Anaheim-Irvine, CA ^^^ 4 Harrisburg-Carlisle, PA 4 New York-White Plains-Wayne, NY-NJ ^^^ 5 Buffalo-Niagara Falls, NY 5 San Jose-Sunnyvale-Santa Clara, CA 6 Lakeland-Winter Haven, FL 6 San Diego-Carlsbad-San Marcos, CA 7 Scranton--Wilkes-Barre, PA 7 Oxnard-Thousand Oaks-Ventura, CA 8 Wichita, KS 8 Oakland-Fremont-Hayward, CA ^^^ 9 Toledo, OH 9 Bridgeport-Stamford-Norwalk, CT 10 Cincinnati-Middletown, OH-KY-IN 10 Honolulu, HI 26
Small Metro Ranks 10 Most Affordable Metro Areas 10 Least Affordable Metro Areas 1 Kokomo, IN 1 Santa Cruz-Watsonville, CA 2 Vineland-Millville-Bridgeton, NJ 2 San Luis Obispo-Paso Robles, CA 3 Davenport-Moline-Rock Island, IA-IL 3 Santa Rosa-Petaluma, CA 4 Bay City, MI 4 Napa, CA 5 Springfield, OH 5 Salinas, CA 6 Dover, DE 6 Santa Barbara-Santa Maria-Goleta, CA 7 Monroe, MI 7 Laredo, TX 8 Salisbury, MD 8 Barnstable Town, MA 9 Cumberland, MD-WV 9 Ocean City, NJ 10 Fairbanks, AK 10 Bend, OR 27
NAR Data Affordability Index 28
1971 - Jan 1973 - Jan 1975 - Jan 1977 - Jan 1979 - Jan 1981 - Jan 1983 - Jan 1985 - Jan 1987 - Jan 1989 - Jan 1991 - Jan 1993 - Jan 1995 - Jan 1997 - Jan 1999 - Jan 2001 - Jan 2003 - Jan 2005 - Jan 2007 - Jan 2009 - Jan 2011 - Jan 2013 - Jan 250 Falling Affordability to 5-year Low But still 5 th best in 40 years 200 150 100 50 0 29
Housing Affordability Index Component Factors: 1) median sales price; 2) mortgage rate; 3) median family income Ratio of Qualifying Income to Median Income Index interpretation: Index=100 when median family income qualifies for an 80% mortgage on a median priced existing single-family home. Index > 100 indicates that more than half of buyers can afford to purchase a median-priced home. The higher the index, more can buy 30
2000 - Jan 2000 - Jul 2001 - Jan 2001 - Jul 2002 - Jan 2002 - Jul 2003 - Jan 2003 - Jul 2004 - Jan 2004 - Jul 2005 - Jan 2005 - Jul 2006 - Jan 2006 - Jul 2007 - Jan 2007 - Jul 2008 - Jan 2008 - Jul 2009 - Jan 2009 - Jul 2010 - Jan 2010 - Jul 2011 - Jan 2011 - Jul 2012 - Jan 2012 - Jul 2013 - Jan 2013 - Jul Median Family Income 70000 65000 60000 55000 50000 45000 40000 31
2000 - Jan 2000 - Jul 2001 - Jan 2001 - Jul 2002 - Jan 2002 - Jul 2003 - Jan 2003 - Jul 2004 - Jan 2004 - Jul 2005 - Jan 2005 - Jul 2006 - Jan 2006 - Jul 2007 - Jan 2007 - Jul 2008 - Jan 2008 - Jul 2009 - Jan 2009 - Jul 2010 - Jan 2010 - Jul 2011 - Jan 2011 - Jul 2012 - Jan 2012 - Jul 2013 - Jan 2013 - Jul 30-yr fixed mortgage rate 9 8 7 6 5 4 3 % 32
2001 - Jan 2001 - Jul 2002 - Jan 2002 - Jul 2003 - Jan 2003 - Jul 2004 - Jan 2004 - Jul 2005 - Jan 2005 - Jul 2006 - Jan 2006 - Jul 2007 - Jan 2007 - Jul 2008 - Jan 2008 - Jul 2009 - Jan 2009 - Jul 2010 - Jan 2010 - Jul 2011 - Jan 2011 - Jul 2012 - Jan 2012 - Jul 2013 - Jan 2013 - Jul 20 Rising Home Prices (% change from one year ago) Blue = NAR Median Price Red = Case-Shiller Index 15 10 5 0-5 -10-15 -20-25 33
NAR Data REALTOR Survey Data 34
REALTORS Confidence Index Monthly survey of REALTORS providing information on residential market conditions and outlook Random, on-line survey Approximately 3,000 responses each month 35
Questionnaire Market Conditions. Current Conditions Confidence Index for SF, Condo. Six Months Ahead Confidence Index for SF, Condo. Buyer and Seller Traffic Index. Distressed Sales Volume, Price Discounts, Property Condition. Time on Market. Buyer and Seller Characteristics. Cash/Non-cash. Type of Buyer First Time, Investor Current Issues Special Questions e.g., impacts of government shutdown, etc. 36
2008 - Oct 2009 - Jan 2009 - Apr 2009 - Jul 2009 - Oct 2010 - Jan 2010 - Apr 2010 - Jul 2010 - Oct 2011 - Jan 2011 - Apr 2011 - Jul 2011 - Oct 2012 - Jan 2012 - Apr 2012 - Jul 2012 - Oct 2013 - Jan 2013 - Apr 2013 - Jul All-Cash Buyers Stayed High even when mortgages were cheap 40% 35% 30% 25% 20% 15% 10% 5% 0% (Cash share as % of total home sales) Normal Range 37
2008 - Jan 2008 - Apr 2008 - Jul 2008 - Oct 2009 - Jan 2009 - Apr 2009 - Jul 2009 - Oct 2010 - Jan 2010 - Apr 2010 - Jul 2010 - Oct 2011 - Jan 2011 - Apr 2011 - Jul 2011 - Oct 2012 - Jan 2012 - Apr 2012 - Jul 2012 - Oct 2013 - Jan 2013 - Apr 2013 - Jul 80 70 60 50 40 30 20 10 0 Buyer and Seller Traffic How Much from Gov t Shutdown and Dysfunction? Buyer Seller 38
NAHB Surveys 39
NAHB Builders Surveys Housing Markets Single-family (monthly since 1984) Multifamily (quarterly since 2003) Remodeling (quarterly since 2001) 55+ (quarterly since 2008) Leading Markets Index 40
NAHB/Wells Fargo Housing Market Index Released monthly on day before starts Survey in first 10 days of month Same questions on Current sales (good, fair, poor), Expected sales over next 6 months (good, fair, poor) Traffic (high/very high, average, low/very low) Diffusion index based from 0 to 100 (good - poor, divide by 2 and add 50) (after seasonal adjustment) National and four census regions 41
Jan '85 Dec Nov Oct Sep Aug Jul Jun May Apr Mar Feb Jan '96 Dec Nov Oct Sep Aug Jul Jun May Apr Mar Feb Jan '07 Dec Nov Oct Sep Aug Jul Jun NAHB/Wells Fargo Housing Market Index 90 80 70 60 50 40 30 20 10 72 54 100 90 80 70 60 50 40 30 20 10 0 0 42
Jan '85 Jan '87 Jan '89 Jan '91 Jan '93 Jan '95 Jan '97 Jan '99 Jan '01 Jan '03 Jan '05 Jan '07 Jan '09 Jan '11 Jan '13 NAHB HMI & Single-family Starts 2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 (000s) 90 80 70 60 50 40 30 20 10 0 SF Starts (L) HMI (R) 43
NAHB Multifamily Housing Market Index Quarterly 1 ½ month after end of quarter Production and vacancy indexes Production index: Stronger, same, weaker for low income, market rate and condo markets Vacancy index: Higher, same, lower for Class A, B and C Diffusion index 44
Mar-03 Aug-03 Jan-04 Jun-04 Nov-04 Apr-05 Sep-05 Feb-06 Jul-06 Dec-06 May-07 Oct-07 Mar-08 Aug-08 Jan-09 Jun-09 Nov-09 Apr-10 Sep-10 Feb-11 Jul-11 Dec-11 May-12 Oct-12 Mar-13 Multifamily Housing Market Index - Production 405 355 305 255 205 155 105 55 (000s) 70 60 50 40 30 20 10 5 0 MF starts (L) Production Index (R) 45
1-Mar-03 1-Aug-03 1-Jan-04 1-Jun-04 1-Nov-04 1-Apr-05 1-Sep-05 1-Feb-06 1-Jul-06 1-Dec-06 1-May-07 1-Oct-07 1-Mar-08 1-Aug-08 1-Jan-09 1-Jun-09 1-Nov-09 1-Apr-10 1-Sep-10 1-Feb-11 1-Jul-11 1-Dec-11 1-May-12 1-Oct-12 1-Mar-13 1-Aug-13 Multifamily Housing Market Index - Vacancy 14 13 12 11 10 9 8 7 6 5 75 65 55 45 35 25 15 5 Census Vacancy Rate (L) NAHB Vancacy Index (R) 46
Remodeling Market Index Current market conditions Major additions & alterations for owners and renters Minor additions & alterations for owners and renters Maintenance & repair for owners and renters Future market conditions Calls for bids for owners and renters Committed work in next 6 months for owners and renters Backlog of committed jobs Appointments for proposals Diffusion index using: higher, about the same, lower ratings 47
Remodeling Market Indexes 60 55 50 45 40 35 30 25 20 15 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 RMI Current conditions Future conditions 48
NAHB/First American Leading Markets Index Progress toward normality Compare most recent 12 months levels to normal year Single-family permits from Census- last normal 2000-2003 House price index from Freddie Mac - last normal 2000-2003 Employment from BLS last normal 2007 Index is average of three ratios Monthly on fourth working day All 360+ MSAs 49
NAHB/First American Leading Markets Index 1.3 1.2 1.1 1 0.9 0.8 0.85 0.7 0.6 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 11 12 12 13 13 50
NAHB/First American Leading Markets Index 51 Rank Oct-2013 Bottom 20% 20% to 40% 40% to 60% 60% to 80% Top 20% Relative to Normal < 74% 74% - 81% 81% - 87% 87% - 97% 97% <
Questions? Answers: www.housingeconomics.com eyeonhousing.org dcrowe@nahb.org 52