Housing Market Indicators Monthly Update February 2020

Housing Market Indicators

Monthly Update

February 2020

U.S. Department of Housing and Urban Development

National housing market indicators available as of February showed

activity in housing markets improved overall. Trends in some of the

top indicators for this month include:

?

Purchases of new homes rebounded to the highest pace since July

2007. New single-family home sales climbed 7.9 percent to 764,000

units (SAAR) in January from an upwardly revised pace of 708,000

in December and were 18.6 percent higher than one year ago.

Purchases were up in all Census regions except the South. Note that

monthly data on new home sales tend to be volatile. (Sources: HUD

and Census Bureau)

?

Sales of previously owned (existing) homes slipped. The National

Association of Realtors? (NAR) reported that January sales of

existing homes (including single-family homes, townhomes,

condominiums, and cooperatives) were down 1.3 percent to 5.46

million units (SAAR) from a pace of 5.53 million in December but

were 9.6 percent higher than a year earlier. Sales were down in the

West and remained the same in the Northeast Census region. Low

mortgage rates typically strengthen sales, but the supply of housing

is still relatively low.

?

Construction of single-family homes declined. Single-family

housing starts were down 5.9 percent to 1.010 million homes

(SAAR) in January from an upwardly revised pace of 1.073 million

the previous month. Starts were down in the Midwest and South

Census regions but were still 4.6 percent higher than a year earlier.

Multifamily housing starts (5 or more units in a structure), at

547,000 units (SAAR), rose 3.0 percent from December and 77.6

percent from a year earlier. Note that month-to-month changes

in the construction of multifamily homes are often volatile. Total

housing starts were down 3.6 percent from December but up 21.4

percent year-over-year. (Sources: HUD and Census Bureau)

?

Year-over-year house price increases were fairly steady, with

annual gains ranging from 3 to 5 percent. The Federal Housing

Finance Agency (FHFA) seasonally adjusted purchase-only house

price index for December estimated that home values rose 0.6

percent over the previous month and 5.2 percent over the previous

year, up from a 5.0-percent annual gain in November. The FHFA

index shows that U.S. home values are 25 percent above their peak,

set in April 2007 during the housing bubble, and stand 59 percent

above the low point reached in May 2011. Another index tracked in

the Monthly Update, the non-seasonally adjusted (NSA) CoreLogic

Case-Shiller? 20-City Home Price Index, posted a 0.04-percent

increase in home values in December and year-over-year returns of

2.9 percent, up from an annual gain of 2.5 percent for November.

Annual house prices gains have been accelerating since July 2019

according to this index. (The FHFA and CoreLogic Case-Shiller? price

indices are released with a 2-month lag.)

?

The inventory of new and existing homes on the market rose.

The listed inventory of new homes for sale, at 324,000 units at the

end of January, increased slightly (0.3 percent) from December but

dropped 6.6 percent year-over-year. That inventory would support

5.1 months of sales at the current sales pace, down from 5.5

months the previous month due to a higher rate of sales in January.

Months¡¯ supply in January was the lowest since November 2017.

Available existing homes for sale, at 1.42 million units in January,

were up 2.2 percent from the previous month but down 10.7

percent from one year ago. The listed inventory represents

a 3.1-month supply, up slightly from 3.0 months in December

(a record low) but down from 3.8 months a year earlier. A shortage

of homes for sale¡ªespecially at the lower end of the market¡ª

has been a constraint on purchases for several years.

?

The affordability of renting a home rose slightly. HUD¡¯s Rental

Affordability Index (RAI), at 108.9 in the fourth quarter of 2019,

increased 0.4 percent from the previous quarter (108.5) but was

down 3.1 percent over the four-quarter period. The rise in the

affordability of renting a home resulted from a 0.6-percent increase

in the inflation-adjusted median income of renter households

which was only partially offset by a 0.2-percent increase in the real,

or inflation-adjusted, median price of leased homes. Note that a

RAI value of greater than 100.0 indicates that a renter household

with median income has more than enough income to qualify

for a median-priced rental home. According to NAR¡¯s composite

homeownership affordability index, the affordability of purchasing

a home increased 1.9 percent in the fourth quarter and was up 11.8

percent over the four-quarter period.

?

Mortgage rates are less than a quarter point above all-time

lows. The 30-year fixed rate mortgage (FRM) reached an average

weekly low in February of 3.45 percent the weeks ending February

6 and 27, down from January¡¯s weekly low of 3.51 percent the

week ending January 30. One year ago, the 30-year FRM was 4.35

percent. (Source: Freddie Mac)

February 2020 Housing Market Indicators | Page 1

U.S. Department of Housing and Urban Development

Housing Market Indicators Monthly Update | February 2020

New Home Sales Rose, But Existing Home Sales Fell

House Prices Continued to Rise in December

Monthly Sales (Thousands)

Monthly House Price Trends by Index ($ Thousands)

8000

300

CoreLogic Case-Shiller

20-City Index

275

CoreLogic (Excluding

Distressed Sales)

1600

Existing

Home Sales

7000

6000

1400

1200

250

5000

1000

225

4000

800

3000

FHFA

Purchase-Only

Index

2000

1000

0

20

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19

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18

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17

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16

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15

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Ja

14

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13

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12

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11

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10

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09

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08

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07

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06

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05

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04

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20

19

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Seasonally Adjusted Annual Rate

Sources: National Association of Realtors?, Census Bureau, and HUD.

See Note 2, Sources and Methodology.

Sources: Standard & Poor¡¯s, Federal Housing Finance Agency, CoreLogic, and HUD.

See Note 1, Sources and Methodology.

The Months¡¯ Supply of Homes for Sale

Rose for Existing Homes but Fell for New Homes

New Construction Rose for Multifamily

Homes but Fell for Single-Family Housing

National Months¡¯ Supply of New and Existing Homes (Months)

National Housing Starts (Thousands)

14

2,000

Existing Homes

Months¡¯ Supply

12

10

600

1,800

New Homes

Months¡¯ Supply

Multifamily

Starts

(right axis)

1,600

1,400

1,200

8

500

400

300

1,000

6

800

200

600

4

Single-Family

Starts

400

Historic Average

2

200

100

Seasonally Adjusted Annual Rate

Sources: Census Bureau and HUD.

February 2020 Housing Market Indicators | Page 2

20

n-

Ja

19

n-

Ja

18

n-

Ja

17

n-

Ja

16

n-

Ja

15

n-

Ja

14

n-

Ja

13

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Ja

12

n-

Ja

11

n-

Ja

10

n-

Ja

09

n-

Ja

08

n-

Ja

07

06

nJa

nJa

05

n-

Ja

nJa

20

19

nJa

n-

18

Ja

17

nJa

16

nJa

n-

15

Ja

14

nJa

13

nJa

12

nJa

n-

11

n-

Ja

10

Ja

09

nJa

n-

08

n-

Ja

07

Ja

06

nJa

05

nJa

n-

04

Ja

nJa

03

Sources: Census Bureau, National Association of Realtors?, and HUD.

0

04

0

0

n-

200

Ja

18

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17

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16

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15

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14

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13

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12

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07

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03

150

Ja

400

0

n-

175

600

New Home Sales

(right axis)

Ja

200

U.S. Department of Housing and Urban Development

Housing Market Indicators Monthly Update | February 2020

Rental Affordability Remains a Challenge

Due to Rising Rents

Homeownership Affordability Remains Above Historic Norm,

Mortgage Rates Continue To Be Low

160

160

140

140

120

120

100

100

HUD Rental

Affordability Index

Q4

Q4

20

19

Q4

20

18

Q4

20

17

Q4

20

16

Q4

20

15

Q4

20

14

Q4

20

13

Q4

20

12

Q4

20

11

Q4

20

10

Q4

20

09

Q4

20

08

Q4

20

07

Q4

20

06

Q4

20

05

Q4

04

20

03

Q4

80

20

19

18

nJa

17

nJa

16

nJa

15

nJa

14

nJa

13

nJa

12

nJa

11

nJa

10

nJa

09

nJa

08

nJa

07

nJa

06

nJa

05

nJa

04

nJa

03

nJa

02

nJa

01

nJa

n-

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00

80

Ja

Ja

180

Q4

3

180

02

Affordability Index

Historic Norm

200

20

4

200

NAR Homeownership

Affordability Index

Q4

5

220

Rental and Homeownership Index Values

01

6

220

00

7

240

20

NAR Housing

Affordability Index

(right axis)

30-Yr Fixed

Mortgage Rate

8

240

20

Percentage Rates and Index Values

9

Sources: Census Bureau ACS and 2000 Decennial Census, BLS, CPS, HUD, and National Association of Realtors?.

See Note 3, Sources and Methodology.

The historic norm of 130 is the median value of NAR¡¯s composite housing affordability index since 1989.

Sources: Freddie Mac and National Association of Realtors?.

Foreclosure Filings Have Remained Low

Supply of Existing Homes Fell in the Fourth Quarter,

Number of Units Held off the Market Remains High

Existing Homes Available for Sale (End of Period) and

Total Vacant Housing Units (Year Round) off Market (Millions)

Monthly Foreclosure Actions (Thousands)

(Includes investor, second home, and jumbo properties)

240

5

200

Units Held off Market

160

4

Foreclosure Starts

120

3

80

2

Existing Homes on Market

40

1

Sources: National Association of Realtors? and Census Bureau.

Ja 8

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Ju 9

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Ja 9

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Ju 0

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Ja 0

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Ju 1

l-1

Ja 1

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Ju 2

l-1

Ja 2

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Ju 3

l-1

Ja 3

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Ju 4

l-1

Ja 4

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Ju 5

l-1

Ja 5

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Ju 6

l-1

Ja 6

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Ju 7

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Ja 7

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Ju 8

l-1

Ja 8

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Ju 9

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Ju

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8

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Ja

n

Q1

Q1

19

20

20

18

Q1

20

17

Q1

16

Q1

15

20

Q1

14

20

Q1

20

Q1

13

20

20

12

Q1

20

11

Q1

20

10

Q1

09

Q1

08

20

Q1

20

Q1

07

20

Q1

06

20

05

20

20

04

Q1

0

Q1

03

20

Foreclosure Completions

Foreclosure starts are default notices or scheduled foreclosure auctions, depending on the state.

Source: ATTOM Data Solutions.

See Note 4, Sources and Methodology.

February 2020 Housing Market Indicators | Page 3

U.S. Department of Housing and Urban Development

Housing Market Indicators Monthly Update | February 2020

The National Homeownership Rate

Rose Again in the Fourth Quarter

FHA Mortgage Lending

FHA as Share of Quarterly Mortgage Originations by Type (Percent)

National Homeownership Rate (Percent)

70

45

40

69

35

Nation

68

30

67

66

25

65

20

64

15

63

10

Historic National Norm

62

5

61

The historic norm of 65.2 percent is the average national homeownership rate since 1965.

Sources: Census Bureau and HUD.

Purchase

Sources: MBA and HUD.

See Note 5, Sources and Methodology.

Home Equity Has Surpassed Its Peak Set at the End of 2005

Since the Third Quarter of 2016

Owners¡¯ Equity In Household Real Estate At End Of Period ($ Trillions)

20

18

16

14

12

10

8

6

4

2

20

05

20 Q1

05

20 Q3

06

20 Q1

06

20 Q3

07

20 Q1

07

20 Q3

08

20 Q1

08

20 Q3

09

20 Q1

09

20 Q3

10

20 Q1

10

20 Q3

11

20 Q1

11

20 Q3

12

20 Q1

12

20 Q3

13

20 Q1

13

20 Q3

14

20 Q1

14

20 Q3

15

20 Q1

15

20 Q3

16

20 Q1

16

20 Q3

17

20 Q1

17

20 Q3

18

20 Q1

18

20 Q3

19

20 Q1

19

Q3

0

Source: Federal Reserve Board.

February 2020 Housing Market Indicators | Page 4

Refinance

Q1

Q1

19

20

18

Q1

Combined

20

Q1

17

20

Q1

16

20

Q1

15

20

Q1

14

20

Q1

13

20

Q1

12

20

Q1

11

20

Q1

10

20

Q1

09

20

Q1

08

20

Q1

07

20

Q1

06

20

05

20

Q1

04

03

20

20

Q1

Q1

20

19

Q1

20

18

Q1

20

17

Q1

20

16

Q1

20

15

Q1

20

14

Q1

20

13

Q1

20

12

Q1

20

11

Q1

20

10

Q1

20

09

Q1

20

08

Q1

20

07

Q1

20

06

Q1

20

05

Q1

20

04

Q1

20

03

Q1

02

01

20

20

Q1

0

60

U.S. Department of Housing and Urban Development

Housing Market Indicators Monthly Update | February 2020

HOUSING MARKET FACT SHEET

Indicator

Mortgage Rates (30-Yr FRM, percent)

Homeownership Affordability (index)

Rental Affordability (index)

Home Prices (indices)

CoreLogic Case-Shiller (NSA)

FHFA (SA)

CoreLogic - Excluding Distressed Sales (NSA)

Home Sales

New (thousands, SAAR)

Existing (thousands, SAAR)

First-Time Buyers (thousands, SAAR)

Distressed Sales (percent, NSA)

Housing Supply

New Homes for Sale (thousands, SA)

New Homes for Sale - Months¡¯ Supply (months, SA)

Existing Homes for Sale (thousands, NSA)

Existing Homes - Months¡¯ Supply (months)

Vacant Units Held Off Market (thousands)

Housing Starts

Total (thousands, SAAR)

Single-Family (thousands, SAAR)

Multifamily (thousands, SAAR)

Mortgage Originations (thousands)

Purchase Originations

Refinance Originations

FHA Mortgage Originations (thousands)

Refinance Originations

Purchase Originations

Purchases by First-Time Buyers

Mortgage Delinquency Rates (percent)

Prime

Subprime

FHA

Seriously Delinquent Mortgages (thousands)

Prime

Subprime

FHA

Change in Aggregate Home Equity ($ billions)

Underwater Borrowers (thousands)

National Homeownership Rate (percent)

Foreclosure Actions (thousands)

Foreclosure Starts

Foreclosure Completions

Short Sales

REO Sales

This Period

3.45

161.8

108.9

Last Period

3.49

163.7 (r)

108.5 (r)

Year Ago

4.35

146.6

112.3

Latest Release

27-Feb-20

December-19

4th Q 19

218.7

283.0

209.1 (s)

218.7

281.3 (r)

208.4 (s,r)

212.7

269.1

201.5 (s)

December-19

December-19

December-19

764

5,460

2,054 (s)

3

708 (r)

5,530 (r)

2,059 (s,r)

3

644

4,980

1,856 (s)

4

January-20

January-20

January-20

December-19

324

5.1

1,420

3.1

3,874

323 (r)

5.5 (r)

1,390 (r)

3.0

4,041

347

6.5

1,590

3.8

3,784

January-20

January-20

January-20

January-20

4th Q 19

1,567

1,010

547

1,626 (r)

1,073 (r)

531 (r)

1,291

966

308

January-20

January-20

January-20

1,115.4 (r)

430.8 (r)

4th Q 19

4th Q 19

1,106.8 (r)

1,083.5 (r)

1,375.3 (r)

779.5 (r)

50.9 (p)

51.1 (p)

41.1 (p)

44.0 (r)

67.0 (r)

44.7 (r)

14.2

41.4

34.4

January-20

January-20

January-20

1.7 (s)

16.1 (s)

9.1

1.8 (s)

16.6 (s)

9.7

1.8

23.2

9.0

January-20

January-20

January-20

187 (s)

41 (s)

334

3.4

1,965

65.1

190 (r,s)

42 (s)

352

31.4 (r)

2,043 (r)

64.8

189

158

338

348.4

2,173

64.8

January-20

January-20

January-20

3rd Q 19

3rd Q 19

4th Q 19

26.9

13.9

2.4 (r)

11.0 (r)

29.4

12.2

2.9

14.6

January-20

January-20

December-19

December-19

26.7

20.8

2.4 (p)

10.0 (p)

SA = seasonally adjusted, NSA = not SA, p = preliminary, r = revised, b = brackets include units in process, s = see Additional Notes in Sources and Methodology.

February 2020 Housing Market Indicators | Page 5

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