the economic and housing situations · microsoft powerpoint - afh present2.pptx author: mm58885...
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The views described here are my own, and do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System. The analysis presented herein is based on data released through May 11, 2017.
The Economic and Housing SituationsAndy Haughwout, Research & Statistics GroupPresentation to the Actuarial Club of Hartford and SpringfieldMay 16, 2017
NATIONAL ECONOMY
-10
-8
-6
-4
-2
0
2
4
6
8
10
-10
-8
-6
-4
-2
0
2
4
6
8
10
2000 2002 2004 2006 2008 2010 2012 2014 2016
GDP Growth% Change – Annual Rate
Source: Bureau of Economic Analysis via Haver Analytics
% Change – Annual Rate
11
12
13
14
15
16
17
18
19
20
11
12
13
14
15
16
17
18
19
20
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
Potential GDP
GDP
2000Q1 to 2007Q4: 2.5% Growth Rate
2009Q2 to 2017Q1: 2.1% Growth Rate
Trillions of 2009 US$ Trillions of 2009 US$
Time Period PotentialGDP Growth
2000 - 2005 2.9%
2005 – 2010 1.7%
2010 – 2015 1.4%
2015 – 2020 1.7%
Source: Bureau of Economic Analysis, Congressional Budget Office via Haver Analytics Note: Shading shows NBER recessions.
58
60
62
64
66
2
4
6
8
10
12
2006 2008 2010 2012 2014 2016
Labor Market IndicatorsPercent Percent
Source: Bureau of Labor Statistics via Haver Analytics Note: Shading shows NBER recessions.
Unemployment Rate(Left Axis)
Labor Force Participation Rate
(Right Axis)
Employment to Population Ratio
(Right Axis)
-10
-8
-6
-4
-2
0
2
4
-10
-8
-6
-4
-2
0
2
4
2000 2002 2004 2006 2008 2010 2012 2014 2016
12 Month % Change
Payroll Employment and Aggregate Hours12 Month % Change
Source: Bureau of Labor Statisticsvia Haver Analytics Note: Shading shows NBER recessions.
Payroll Employment
Aggregate Hours
-2
-1
0
1
2
3
4
5
-2
-1
0
1
2
3
4
5
2000 2002 2004 2006 2008 2010 2012 2014 2016
12 Month % Change 12 Month % Change
Source: Bureau of Economic Analysis via Haver Analytics Note: Shading shows NBER recessions.
Total PCE
Core PCE
FOMC Objective
PCE Deflator
REGIONAL ECONOMY
Private-Sector Job TrendsPercent Change From Previous Peak to March 2017
AL
Down Flat Up to 3% Up 3% to 7% Up More Than 7%
Source: Bureau of Labor Statistics and Moody's Economy.com. PRIVEMPLOYMAP1 11MAY2017
AKFL
HI
PR
AZAR
CA CO
CT
NJ
DE
MD
GA
ID
IL IN
IA
KSKY
LA
ME
VT
NH
MA
RIMI
MN
MS
MO
MT
NENV
NM
NY
NC
ND
OH
OK
OR
PA
SC
SD
TN
TX
UT
VA
WA
WV
WI
WY
Private-Sector Job TrendsYear-Over-Year Percent Change as of March 2017
AL
Down Flat Up to 1.25% Up 1.25% to 2% Up More Than 2%
Source: Bureau of Labor Statistics and Moody's Economy.com. PRIVEMPLOYMAP2 11MAY2017
AKFL
HI
PR
AZAR
CA CO
CT
NJ
DE
MD
GA
ID
IL IN
IA
KSKY
LA
ME
VT
NH
MA
RIMI
MN
MS
MO
MT
NENV
NM
NY
NC
ND
OH
OK
OR
PA
SC
SD
TN
TX
UT
VA
WA
WV
WI
WY
Unemployment RatesSeasonally Adjusted, March 2017
At Least 1% Lower Than U.S. Within 1%, Plus or Minus, of U.S. At least 1% More Than U.S.
AL
Source: Bureau of Labor Statistics and Moody's Economy.com. UNEMPLOYMENTMAP1 11MAY2017
AKFL
HI
PR
AZAR
CA CO
CT
NJ
DE
MD
GA
ID
IL IN
IA
KSKY
LA
ME
VT
NH
MA
RIMI
MN
MS
MO
MT
NENV
NM
NY
NC
ND
OH
OK
OR
PA
SC
SD
TN
TX
UT
VA
WA
WV
WI
WY
60
70
80
90
100
110
2006 2007 2008 2009
Shading indicates NBER recession
2010 2011 2012 2013 2014 2015 2016 2017 2018
United States
NYC Metro
Fairfield
Westchester
Rockland
Home PricesCoreLogic Home Price Index, Seasonally Adjusted
Index (Mar2006=100)120
Source: CoreLogic Home Price Index (including distressed sales). HPI_3 11MAY2017
Mar
HOUSING MARKET
Housing Starts
0
400
800
1200
1600
2000
0
50
100
150
200
250
300
350
400
450
2000 2002 2004 2006 2008 2010 2012 2014 2016
Thousands, 3 MMA Thousands, 3 MMA
Source: Census Bureau via Haver Analytics Note: Shading shows NBER recessions.
Total Multifamily(Left Axis)
Single Family(Right Axis)
0
1000
2000
3000
4000
5000
6000
7000
0
200
400
600
800
1000
1200
1400
2000 2002 2004 2006 2008 2010 2012 2014 2016
New Single Family Sales(Left Axis)
Thousands Thousands
Source: Census and National Association of Realtors via Haver Analytics
Existing Single Family Sales
(Right Axis)
New and Existing Home Sales
Note: Shading shows NBER recessions.
Single Family Housing Market (through EOY 2016)
3
4
5
6
7
8
9
10
11
12
13
-20
-15
-10
-5
0
5
10
15
20
25
2000 2002 2004 2006 2008 2010 2012 2014 2016
12 Month % Change Months
Source: CoreLogic, National Association of Realtors via Haver Analytics Note: Shading shows NBER recessions.
Single Family House Price Index
(Left Axis)
Months’ Supply
(Right Axis)
“Normal” Range for Months’ Supply
HOUSEHOLD FINANCE AND
HOMEOWNERSHIP
0
3
6
9
12
15
0
3
6
9
12
15Mortgage HE Revolving Auto Loan Credit Card Student Loan Other
Trillions of Dollars
Total Debt Balance and its Composition Trillions of Dollars
Source: FRBNY Consumer Credit Panel/Equifax
2016Q4 Total: $12.58 Trillion
2016Q3 Total: $12.35 Trillion
(3%)
(10%)
(6%)
(9%)
(4%)
(67%)
Median
25th percentile
10th percentile
500
550
600
650
700
750
800
500
550
600
650
700
750
800
03:Q1 05:Q1 07:Q1 09:Q1 11:Q1 13:Q1 15:Q1
Credit Score at Origination: Mortgages*Score Score
Source: FRBNY Consumer Credit Panel/Equifax* Credit Score is Equifax Riskscore 3.0; mortgages include first-liens only.
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,00000 -
Q1
00 -
Q3
01 -
Q1
01 -
Q3
02 -
Q1
02 -
Q3
03 -
Q1
03 -
Q3
04 -
Q1
04 -
Q3
05 -
Q1
05 -
Q3
06 -
Q1
06 -
Q3
07 -
Q1
07 -
Q3
08 -
Q1
08 -
Q3
09 -
Q1
09 -
Q3
10 -
Q1
10 -
Q3
11 -
Q1
11 -
Q3
12 -
Q1
12 -
Q3
13 -
Q1
13 -
Q3
14 -
Q1
14 -
Q3
15 -
Q1
15 -
Q3
16 -
Q1
16 -
Q3
Owners Equity ($Billion, Left) Owners Equity (% of value, Right)
Owners’ Equity Has Been Growing
Source: Federal Reserve Board
0
200
400
600
800
1,000
1,200
1,400
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Total student debt by age group
up to 29
30 to 39
40 to 49
50 to 59
60+
Billions of Dollars
Age:
Student Debt Totaled $1.3 Trillion in 2016, Up
170% from 2006
Source: New York Fed Consumer Credit Panel/Equifax
Delinquency and Default Associated with Lower Credit Scores
and Homeownership Rates at Age 30
25
744
667
596
549
500
550
600
650
700
750
800
never late(52%)
ever 30-90days late
(5%)
ever 120+days late
(12%)
everdefaulted
(31%)
Median Credit Score in 2016*
36%
18%
12%
3%
never late(52%)
ever 30-90days late
(5%)
ever 120+days late
(12%)
everdefaulted
(31%)
Homeownership in 2016*
* Among borrowers who were age 30 in 2016 and left school between 2006-2011.
Source: New York Fed Consumer Credit Panel/Equifax
REFERENCE
0
1
2
3
4
0
1
2
3
4
2007 2009 2011 2013 2015 2017
Annual % change Annual % change
Source: Bureau of Labor Statistics via Haver Analytics Note: Shading shows NBER recessions.
Average Hourly Earnings
Employment Cost Index
Growth of Average Hourly Earnings and ECI
Housing leverage distribution approaching 2005
0
10
20
30
40
50
60
70
80
90
100%
of m
ort
gaged p
ropert
ies
2005
q220
06q2
2007
q220
08q2
2009
q220
10q2
2011
q220
12q2
2013
q220
14q2
2015
q220
16q2
CLTV < 60% CLTV 60 - 80%
CLTV 80 - 100% CLTV 100 - 120%
CLTV > 120%
Source: A. Fuster and A. Haughwout, “Tracking and Stress-Testing US Household Leverage,” 2016, updated.
28
Super-prime share rises as subprime falls
Source: New York Fed Consumer Credit Panel/Equifax
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
2003 2008 2016
Total Balances By Credit Score
<620
620-659
660-719
720-759
760+
Credit Score:
23.7%
29.9%
21.0%
8.9%
16.6%
33.9%
24.6%
15.7%
6.8%
19.0%
41.3%
23.0%
15.9%
6.6%
13.2%
$12.6 Trillion
Trillions of Dollars
$8.1 Trillion
$12.7 Trillion
*data for 4th quarter of each year; credit scores are Equifax Riskscore 3.0 29
As credit quality improves, delinquency rates fall
0
5
10
15
Credit Card
Mortgage
Auto Loan
HELOC
Percent of Balance 90+ Days Delinquent
Percent
Source: New York Fed Consumer Credit Panel/Equifax
Student Loan
30
Higher Default Rates Among Borrowers
from Lower Income Areas
Source: New York Fed Consumer Credit Panel/Equifax, Internal Revenue Service
35%
24%
18%
13%
0%
5%
10%
15%
20%
25%
30%
35%
40%
less than $40k $40k-$60k $60k-$80k $80k+Area Average Income
5 year default rate by income area (2006-2011 cohorts)