may 2016 economic and housing market outlook
TRANSCRIPT
8/17/2019 May 2016 Economic and Housing Market Outlook
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LINDA LEE
Chair, Residential Economic
Issues and Trends Forum
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CHRISTIAN Z ARIF
Vice Chair, Residential Econom
Issues and Trends Forum
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HOUSING AND ECONOMIC OUTLO
L AWRENCE YUN, PH.D.
CHIEF ECONOMIST
NATIONAL ASSOCIATION OF REALTORS®
PRESENTATION IN W ASHINGTON, D.C.
M AY 12, 2016
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EXISTING HOME S ALES – MODERATE REC
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N ATIONAL PENDING S ALES INDEX – GOOD(SEASONALLY ADJUSTED)
Source: NAR
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REGIONAL PENDING CONTRACT(% CHANGE FROM ONE YEAR AGO TO M ARCH)
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REGIONAL MEDIAN PRICE CHAN
(3-YEAR PRICE CHANGE FROM 2012 TO 2
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HOUSING AFFORDABILITY INCOME AT 3.8% MORTGAGE R ATE
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HOUSING AFFORDABILITY INCOME AT 6% MORTGAGE R ATE
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VERY CYCLICAL V ACATION HOME S(50% DECLINE AND 100% INCREASE)
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NEW HOME S ALES – STILL SUPER(75% DECLINE AND 60% GAIN)
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SINGLE-FAMILY HOUSING START
GROSSLY INADEQUATE Thousand units
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RISING SHARE OF PRICEY NEW HO
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NEW HOME PRICE VS. EXISTING HOME
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LOW INVENTORY MONTHS SUP
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U.S. POPULATION
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EVEN LOWER INVENTORY IN RELATION TO HOUSEHOLDS
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MULTIFAMILY HOUSING STARTS
SUFFICIENTLY ADEQUATE
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RENTAL V ACANCY R ATE –LOW BUT STABILIZING
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BIG DRIVER OF FUTURE INFLATIO
RENTS RISING AT 7-YEAR HIGH
NO CPI INFLATION YET
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NO CPI INFLATION – YET,BUT HIGHER FUTURE INFLATION WITH NUDGE
HIGHER
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RELIEF ON RENT?
• If higher rent then higher inflation anhigher mortgage rates
• If lower rent than lower inflation andsteady mortgage rates
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WIDENING METRO HOME PRICE(640% VS. 241% GROWTH FROM 1980)
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S AN FRANCISCO AREA OUTMIGRA
• 47,894 out of SF County• 37,378 out of San Mateo County
• 73,925 out of Santa Clara County
• 71,551 out of Alameda County
• Seattle• Portlan• Boise• Salt La• Denve• Austin• Raleig
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WIDENING JOBS MOBILE AND CHARLESTON SC
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BOEING AIRPLANE M ADE IN CHARL
WIDENING JOBS
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WIDENING JOBS N ASHVILLE AND MEMPHIS
WIDENING JOBS
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WIDENING JOBS GRAND R APIDS AND FLINT
JOBS
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JOBS (8 MILLION LOST … 14 MILLION GAINED)
In thousands
TOP AND BOTTOM STATES FOR JOBS
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TOP AND BOTTOM STATES FOR JOBS
The Best % Gain in 12 months
Idaho 3.8
Utah 3.5
Nevada 3.4
Florida 3.0
Washington 3.0
California 2.9
South Carolina 2.9
Oregon 2.7
Arizona 2.3
The Worst % Gai
Wyoming
Oklahoma
Louisiana
West Virginia
North Dakota
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STATE LEVEL EMPLOYMENT
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HOME BUYER TRAFFIC
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WHO’S ON DECK AFTER PUERTO RStates (worst and best) Unfunded Liability %
Illinois 57%
Kentucky 50%
Connecticut 47%
Louisiana 44%
New Hampshire 43%
Tennessee 8%
North Carolina 5%South Dakota 4%
Washington 2%
Wisconsin 0%
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BIGGEST LIES OCCUR …
• After Fishing
• During a War
• Before an Electio
FEDERAL DEBT CUMULATIVE
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FEDERAL DEBT … CUMULATIVE ( $ MILLION; DEBT HELD BY PUBLIC EXCLUDING
INTRA-GOVERNMENTAL HOLDINGS)
Q E
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QUANTITATIVE E ASING
NEGATIVE INTEREST RATES
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NEGATIVE INTEREST R ATES … GOOD-BYE BEN?
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HEALTHIER HOMEOWNERS
BORROWERS NOT DEFAULTING – ESPECIALLY VE
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BORROWERS NOT DEFAULTING – ESPECIALLY VE(SERIOUS DELINQUENCY R ATE)
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RISING HOUSING WEALTH
$ billion
MORTGAGE R ATES S AY TODAY’S HOMEB
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ARE LUCKIEST IN A GENERATION %
BUT UNLUCKIEST IN BECOMING HOMEO
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BUT UNLUCKIEST IN BECOMING HOMEO
%
STUDENT LOAN …
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NAR-ASA STUDY IMPLIES 5 YEAR DELA(IN $BILLION)
HOMEOWNERSHIP PARTICULARLY
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HOMEOWNERSHIP P ARTICULARLY FOR MINORITY HOUSEHOLDS
%
HOMEOWNERSHIP PARTICULARLY
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HOMEOWNERSHIP P ARTICULARLY FOR MINORITY HOUSEHOLDS
%
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TUITION COSTS AT H ARVARD
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FORECAST
ECONOMIC FORECAST
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ECONOMIC FORECAST
2014 2015 2016
Forecast F
GDP Growth 2.6% 2.1% 1.6%
Job Growth +3.0 million +2.6 million +1.6 million +2
CPI Inflation 1.6% 0.3% 1.7%
10-year Treasury 2.6% 2.1% 2.1%
HOUSING FORECAST
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2014 2015 2016
Forecast
New Home Sales 437,000 500,000 540,000
Existing Home Sales 4.9 million 5.3 million 5.4 million
Median Price
Growth
+ 5.7% + 6.8% +4.5%
30-year Rate 4.2% 3.9% 3.9%
REALTOR® MEMBERSHIP
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REALTOR MEMBERSHIP
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2016 PRESIDENTIAL ELECTION
STRONG FEELINGS, FOR AND AGA
POLLS: PEOPLE DO NOT LIKE TRUMP OR C
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POLLS: PEOPLE DO NOT LIKE TRUMP OR CS AY NO TO DEMOCRACY AND
YES TO PRIVATE PROPERTY RIGHTS
Singapore-
– Had no Democracy
– Higher per capita income than U.S.
– Futuristic city
– English: official language
– Strong private property rights protection
REALTORS® BELIEVE IN
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DEMOCRACY AND PROPERTY RIG