Upload
others
View
2
Download
0
Embed Size (px)
Citation preview
Current State and Mortgage
Market Outlook
©2016 CoreLogic, Inc. All rights reserved. Proprietary and Confidential.
Compass Research & Trading, LLC
January 10, 2017
Sam Khater
VP & Deputy Chief Economist
Housing Market Heading into 2017 on Solid GroundWeekly Data, Percent Change from Year Ago in Top 100 Markets*
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
14%
Sept1
7 2
01
5O
ct15
2015
Nov
12
2015
Dec
10
2015
Ja
n0
7 2
01
6F
eb
42016
Ma
r3
2016
Mar
31
2016
Apr
28
2016
May
26
2016
Ju
n2
3 2
01
6Ju
ly21
2016
Aug
18 2
016
Sep
15
20
16
Oct13
2016
Nov
10
2016
Dec
82016
Ja
n5
2017
10%
9%
8%
7%
6%
5%
4%
3%
2%
1%
0%
2 ©2016 CoreLogic, Inc. All rights reserved. Proprietary and Confidential.Source: CoreLogic. *Four week moving average.
Sept1
7 2
01
5O
ct15
2015
Nov
12
2015
Dec
10
2015
Ja
n0
7 2
01
6F
eb
42016
Mar
32016
Mar
31
2016
Apr
28
2016
May
26
2016
Jun
23 2
016
Ju
ly21
2016
Aug
18
20
16
Sep
15
20
16
Oct13
2016
Nov
10
2016
Dec
82016
Ja
n5
2017
Home Sales Home Prices
Purchase Mortgage Application Growth Decelerating Before Late ‘16 Rate SpikePercent Change from Year Ago in Purchase Application 4 Week Moving Average
2012 - 2016 2016 Only
3 ©2016 CoreLogic, Inc. All rights reserved. Proprietary and Confidential.Source: MBA
-30%
-20%
20%20%
10%
15%
0%
10%
-10%
30%
40%
Ja
n-1
2A
pr-
12
Ju
l-12
Oct-
12
Ja
n-1
3A
pr-
13
Ju
l-13
Oct-
13
Ja
n-1
4A
pr-
14
Ju
l-14
Oct-
14
Ja
n-1
5A
pr-
15
Ju
l-15
Oct-
15
Ja
n-1
6A
pr-
16
Ju
l-16
Oct-
16
0%
5%
25%
30%
25
-Ma
r 8
-Ap
r 2
2-A
pr
6-M
ay
20
-Ma
y
3-J
un
1
7-J
un
1
-Ju
l 1
5-J
ul
29
-Ju
l 1
2-A
ug
26
-Au
g
9-S
ep
2
3-S
ep
7-O
ct
21
-Oct
4-N
ov
18
-Nov
2-D
ec
16
-Dec
30
-Dec
FHA Purchase Share of Market Sensitive to MIP ChangesFHA Share of Purchase Originations
45.0%
40.0%
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
Ja
n-0
0
Au
g-0
0
Ma
r-0
1
Oct-
01
Ma
y-0
2
De
c-0
2
Ju
l-0
3
Fe
b-0
4
Se
p-0
4
Ap
r-0
5
No
v-0
5
Ju
n-0
6
Ja
n-0
7
Au
g-0
7
Ma
r-0
8
Oct-
08
Ma
y-0
9
De
c-0
9
Ju
l-1
0
Fe
b-1
1
Se
p-1
1
Ap
r-1
2
No
v-1
2
Ju
n-1
3
Ja
n-1
4
Au
g-1
4
Ma
r-1
5
Oct-
15
Ma
y-1
6
+35 Bps
FHA MIP
-50 Bps
FHA MIP
-25 Bps
FHA MIP
4 ©2016 CoreLogic, Inc. All rights reserved. Proprietary and Confidential.Source: CoreLogic
FHA MIP Not Just About Product but Temporal SubstitutionPercent Change from Year Ago for 95%+ LTV Purchase Loans
-50 Bps FHA MIP
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
60%
Ja
n-1
2
Apr-
12
Jul-12
Oct-
12
Jan
-13
Apr-
13
Ju
l-13
Oct-
13
Jan
-14
Apr-
14
Ju
l-14
Oct-
14
Jan
-15
Apr-
15
Ju
l-15
Oct-
15
Jan-1
6
Ap
r-1
6
Ju
l-16
FHA 95+ Loans All Non-FHA 95+ Loans
5 ©2016 CoreLogic, Inc. All rights reserved. Proprietary and Confidential.Source: CoreLogic
34
33
32
31
30
29
6 ©2016 CoreLogic, Inc. All rights reserved. Proprietary and Confidential.Source: BLS
6
35
Jan
-00
Oct-
00
Ju
l-0
1
Apr-
02
Jan
-03
Oct-
03
Ju
l-0
4
Apr-
05
Jan
-06
Oct-
06
Ju
l-0
7
Apr-
08
Jan
-09
Oct-
09
Ju
l-1
0
Apr-
11
Jan
-12
Oct-
12
Ju
l-1
3
Apr-
14
Jan
-15
Oct-
15
Ju
l-1
6
Boom in Millennial Job Growth Provides
Tailwind to Purchase Market2
5–
34
Ye
ar
Old
Em
plo
ym
en
t,in
Mill
ion
s
20%
18%
16%
14%
12%
10%
8%
6%
4%
Millennial Share of Purchase Applicants Lower in Expensive MarketsYTD 2016 Share of Applicants Under 30 Years Old
7 ©2016 CoreLogic, Inc. All rights reserved. Proprietary and Confidential.Source: CoreLogic
7
YT
D2016 S
hare
ofA
pplic
ants
Belo
w30
Years
Old
0
2,000
4,000
6,000
8,000
10,000
Ja
n-0
0
Ja
n-0
1
Ja
n-0
2
Ja
n-0
3
Ja
n-0
4
Ja
n-0
5
Ja
n-0
6
Ja
n-0
7
Ja
n-0
8
Ja
n-0
9
Ja
n-1
0
Ja
n-1
1
Ja
n-1
2
Ja
n-1
3
Ja
n-1
4
Ja
n-1
5
Ja
n-1
6
Refinance Mortgage Applications Down, But Should Not Decline Much More at Current RatesWeekly Level
2000 - 2016 2013 - 2016
12,000 6,000
8 ©2016 CoreLogic, Inc. All rights reserved. Proprietary and Confidential.Source: MBA
0
1,000
2,000
3,000
4,000
5,000
Ja
n-1
3
Ap
r-13
Ju
l-13
Oct-
13
Ja
n-1
4
Ap
r-14
Ju
l-14
Oct-
14
Ja
n-1
5
Ap
r-15
Ju
l-15
Oct-
15
Ja
n-1
6
Ap
r-16
Ju
l-16
Oct-
16
Why Should Refi’s Not Drop Much More at Current Rates?
Because Cash-Out Refinances Recovering Due to Higher PricesCash Out Share of Refinance Originations
45.0%
40.0%
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
9 ©2016 CoreLogic, Inc. All rights reserved. Proprietary and Confidential.Source: CoreLogic
Jan
-00
Sep-0
0
May-0
1
Jan
-02
Sep-0
2
May-0
3
Jan
-04
Sep-0
4
May-0
5
Jan
-06
Sep-0
6
May-0
7
Jan
-08
Sep-0
8
May-0
9
Jan
-10
Sep-1
0
May-1
1
Jan
-12
Sep-1
2
May-1
3
Jan-1
4
Sep-1
4
May-1
5
Jan
-16
Sep-1
6
Why Should Refi’s Not Drop Much More at Current Rates?Because FHA to Conventional Refinance is ElevatedFHA to Conventional Refinancing
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
10 ©2016 CoreLogic, Inc. All rights reserved. Proprietary and Confidential.Source: CoreLogic
Jan
-00
Sep
-00
May-0
1
Jan
-02
Sep
-02
May-0
3
Jan
-04
Sep
-04
May-0
5
Jan
-06
Sep-0
6
May-0
7
Jan
-08
Sep
-08
May-0
9
Jan
-10
Sep
-10
May-1
1
Jan-1
2
Sep
-12
May-1
3
Jan
-14
Sep
-14
May-1
5
Ja
n-1
6
Why Should Refi’s Not Drop Much More at Current Rates?
Because VA-to-VA Refinances High and RisingSerial Refinance VA share of Refinance Originations
10%
9%
8%
7%
6%
5%
4%
3%
2%
1%
0%
11 ©2016 CoreLogic, Inc. All rights reserved. Proprietary and Confidential.Source: CoreLogic
Ja
n-0
1
Aug-0
1
Mar-
02
Oct-
02
May-0
3
Dec-0
3
Ju
l-04
Feb-0
5
Sep-0
5
Apr-
06
Nov-0
6
Ju
n-0
7
Ja
n-0
8
Aug-0
8
Mar-
09
Oct-
09
May-1
0
Dec-1
0
Ju
l-11
Feb-1
2
Sep-1
2
Apr-
13
Nov-1
3
Ju
n-1
4
Ja
n-1
5
Aug-1
5
Mar-
16
HELOC Volume Up in 2016, But Growth Front Loaded
Approved HELOCs (Billions of Dollars)
$400
$350
$300
$250
$200
$150
$100
$50
$0
12 ©2016 CoreLogic, Inc. All rights reserved. Proprietary and Confidential.
2000 2004 2008 2012 2016(Through August,
Annualized)
Source: CoreLogic
©2016 CoreLogic, Inc. All rights reserved. Proprietary
At First Glance Underwriting Seems ConservativeCoreLogic Housing Credit Index (2001 = 100)
Credit Score LessThan 640
LTV Share 95 AndAbove
DTI Share 43And Above
Non-Owner Occupancy Share
Condo Co-op Share
Low & No Doc Share
0
25
50
75
100
125
150
Benchmark (2001 and 2002 Originations)
Current (2016:Q3)
13 and Confidential.
Housing Credit Index
120
100
80
60
40
20
140
20
01
:Q1
20
01
:Q3
20
02
:Q1
20
02
:Q3
20
03
:Q1
20
03
:Q3
2004
:Q1
20
04
:Q3
2005:Q
12
00
5:Q
32
00
6:Q
12
00
6:Q
32
00
7:Q
12
00
7:Q
32
00
8:Q
12
00
8:Q
32
00
9:Q
12009:Q
32
01
0:Q
12
01
0:Q
32011
:Q1
2011
:Q3
20
12
:Q1
20
12
:Q3
20
13
:Q1
2013
:Q3
20
14
:Q1
20
14
:Q3
20
15
:Q1
20
15
:Q3
20
16
:Q1
Index (2001=100)
Source: CoreLogic Loan Servicing Database
HCI Factors
Credit Score
Loan-to-Value Ratio (LTV)
Debt -to-Income Ratio (DTI)
Documentation Type
Occupancy Status
Condo/Co-op Share
2001
-2003
Be
nchm
ark
More
Ris
kLess
Ris
k
14 ©2016 CoreLogic, Inc. All rights reserved. Proprietary and Confidential.
Leverage is at All Time High for Entry Level BuyersCLTV by Price Segment, Includes Piggybacks/Silent Seconds
95
90
85
80
75
70
65
$2
0,0
00
$5
0,0
00
$80,0
00
$11
0,0
00
$1
40
,00
0
$1
70
,00
0
$2
00
,00
0
$2
30
,00
0
$2
60
,00
0
$2
90
,00
0
$3
20
,00
0
$3
50
,00
0
$3
80
,00
0
$4
10
,00
0
$4
40
,00
0
$4
70
,00
0
$5
00
,00
0
$5
30
,00
0
$5
60
,00
0
$5
90
,00
0
$6
20
,00
0
$6
50
,00
0
$6
80
,00
0
$7
10
,00
0
$7
40
,00
0
$7
70
,00
0
$8
00
,00
0
2000 2005 2016 (YTD)
CLT
V
15 ©2016 CoreLogic, Inc. All rights reserved. Proprietary and Confidential.Source: CoreLogic
16 ©2016 CoreLogic, Inc. All rights reserved. Proprietary and Confidential.Source: CoreLogic
2017 US Single-Family Housing Market Forecast
17 ©2016 CoreLogic, Inc. All rights reserved. Proprietary and Confidential.
1. Low mortgage rates are the norm, but going up slightly
2. Home prices up +4% to +5%
3. Purchase originations up +6% (+2% to +10%) to $1.1 trillion
Refinance originations down -44% (-33% to -55%) to $511 billion
Total originations down -18% (-11% to -25%) to $1.6 trillion
Refi share 32% (28% to 35%)
4. New loan performance is pristine but we are at trough of credit cycle
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.
18 ©2016 CoreLogic, Inc. All rights reserved. Proprietary and Confidential.
Where to find more information
http://www.corelogic.com/about-us/research.aspx
Twitter: @TheSamKhater