© 2018 CoreLogic — Proprietary. This material may not be reproduced in any form without express written permission.i

| The MarketPulse g December 2018 g Volume 7, Issue 12

The MarketPulse

DECEMBER 2018

© 2018 CoreLogic — Proprietary. This material may not be reproduced in any form without express written permission.ii

Table of Contents | The MarketPulse g December 2018 g Volume 7, Issue 12

Table of Contents

U.S. Economic Outlook: December 2018 .....................................................1Peering Into 2019: The Outlook for the U.S. Economy and Housing Market

Despite Slowing Home Price Growth, Investors Can Remain Confident in the Market .................................................................................2New Data from the S&P CoreLogic Case-Shiller Index Reveals Reasons Behind Slowing Growth

Smaller Home-Equity Gains Reflect Slowing in Price Growth ....................3

Borrower Equity Update: Third Quarter 2018

The Race to Recovery ....................................................................................4

The Alaska Earthquake of Nov 30, 2018

In the News .................................................................................................................................... 5

10 Largest CBSA — Loan Performance Insights Report August 2018 ...................................... 8

Home Price Index State-Level Detail — Combined Single Family Including Distressed October 2018 ................................................................................................................................. 8

Home Price Index .......................................................................................................................... 9

Overview of Loan Performance .................................................................................................. 9

CoreLogic HPI® Market Condition Overview ...................................................................................................... 10

October 2018October 2023 Forecast

National Home Equity Distribution ............................................................................................. 11

Map of Average Year-Over-Year Equity Gain per Borrower ................................................................... 11

Variable Descriptions .................................................................................................................. 12

Housing Statistics

December 2018

HPI® YOY Chg 5.4%

HPI YOY Chg XD 5.1%

NegEq Share (Q3 2018) 4.1%

The MarketPulseVolume 7, Issue 12December 2018Data as of October 2018 (unless otherwise stated)

News Media Contact

Alyson Austinalaustin@corelogic.com 949.214.1414 (office)

© 2018 CoreLogic — Proprietary. This material may not be reproduced in any form without express written permission. 1

The MarketPulse g December 2018 g Volume 7, Issue 12 | Articles

U.S. Economic Outlook: December 2018Peering Into 2019: The Outlook for the U.S. Economy and Housing Market

By Frank E. Nothaft

With the new year soon upon us, here’s our take on what will be making economic news next year.

For one, economic growth just needs to last seven more months to set the record for the longest expansion in U.S. history, based on business cycle dates going back more than 160 years.1 We anticipate economic growth will be about 2.4 percent during 2019, a bit slower than the 3.1 percent we expect for 2018 but sufficient to push the unemployment rate to about 3.4 percent. This would mark the lowest unemployment rate in 50 years.

The good news on employment and growth leads to our next projection for 2019: higher interest rates. The Federal Reserve will continue to keep an eye on inflation while pursuing its goal of normalizing the level of interest rates. We expect long-term yields to rise as well, nudging 30-year fixed mortgage rates up to an average of about 5.25 percent by next December, the highest in a decade. (Figure 1)

Higher interest rates will affect housing and mortgage market activity. At the margin, homeowners who currently have low-rate mortgages will be incented to stay in their home rather than sell, keeping the new-listings flow relatively low. The larger monthly payments that come with higher mortgage rates will likely soften buyer demand, leading to less pressure on home prices. For our national CoreLogic Home Price Index, we forecast price growth to slow by one percentage point over the next 12 months. (Figure 2)

For mortgage lending, higher rates mean even less refinance in 2019. We expect the refinance share of originations to decline to about 25 percent, the lowest in 25 years.2 The dollar decline in refinance will be largely offset by the dollar increase in the home-purchase lending, keeping the overall dollar volume of originations about the same between 2018 and 2019. The growth in home-equity, and choice of homeowners to stay rather than sell, should increase home remodeling expenditures and the origination of HELOCs for home improvement purposes. ■

Dr. Frank NothaftExecutive, Chief Economist, Office of the Chief Economist

Frank Nothaft holds the title executive, chief economist for CoreLogic. He leads the Office of the Chief Economist and is responsible for analysis, commentary and forecasting trends in global real estate, insurance and mortgage markets.

FIGURE 1. MORTGAGE RATES IN 2019: HIGHEST SINCE 2009Interest Rate on 30-Year Fixed-Rate Mortgages

3%

4%

5%

6%

7%

2007 2009 2011 2013 2015 2017 2019

GreatRecession

Forecast

April 2011:

5.1%

5.4%

June 2009:

Dec. 2019:

5.25%

2001-04Refi Boom

2009-13Refi Boom

Tax ImplementedAugust 2016

nothaft: fig 1Peak 18.4%

Source: Freddie Mac Primary Mortgage Market Survey®; forecast is an average of MBA, Fannie Mae, Freddie Mac, NAHB, NAR and IHS Market projections.

FIGURE 2. HOME-PRICE GROWTH FORECAST TO SLOW IN 2019CoreLogic Home Price Index Growth for U.S. (annual, percent)

3%

4%

5%

6%

Oct. 2014 Oct. 2015 Oct. 2016 Oct. 2017 Oct. 2018 Oct. 2019

2001-04Refi Boom

2009-13Refi Boom

Tax ImplementedAugust 2016

nothaft: fig 2Peak 18.4%

6.1%

5.4%

Forecast4.8%

Source: CoreLogic Home Price Index and HPI Forecast for U.S. (December 4, 2018 release).

1 The longest trough-to-peak cycle to date was the March 1991 to

March 2001 expansion; see https://www.nber.org/cycles.html.2 Home Mortgage Disclosure Act data indicate that refinance

comprised 23 percent of single-family originations from mid-1994

to mid-1995.

© 2018 CoreLogic — Proprietary. This material may not be reproduced in any form without express written permission.2

Articles | The MarketPulse g December 2018 g Volume 7, Issue 12

Despite Slowing Home Price Growth, Investors Can Remain Confident in the MarketNew Data from the S&P CoreLogic Case-Shiller Index Reveals Reasons Behind Slowing Growth

By Ralph McLaughlin

Continued on page 5

FIGURE 1. S&P CORELOGIC CASE-SHILLER INDEXES™

Annual Change, National

0%

1%

2%

3%

4%

5%

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201

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2015

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ay

2018

June

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ly 2

018

Aug

ust 2

018

Sep

tem

ber

201

8

Conforming Limit

mclaughlin: fig 1

Source: S&P CoreLogic Case-Shiller Indexes, not seasonally adjusted (November 27, 2018 release)

FIGURE 2. S&P CORELOGIC CASE-SHILLER INDEXESAnnual Change, 10-City vs 20-City

0%

1%

2%

3%

4%

5%

6%

7%

8%

Janu

ary

201

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2015

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015

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Dec

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pril

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6M

ay

2016

June

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6Ju

ly 2

016

Aug

ust 2

016

Sep

tem

ber

201

6O

ctob

er 2

016

Nov

embe

r 201

6D

ecem

ber 2

016

Janu

ary

201

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brua

ry 2

017

Ma

rch

2017

Ap

ril 2

017

Ma

y 20

17Ju

ne 2

017

July

201

7A

ugus

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pte

mb

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017

Oct

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ovem

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017

Dec

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r 201

7Ja

nua

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018

Febr

uary

201

8M

arc

h 20

18A

pril

201

8M

ay

2018

June

201

8Ju

ly 2

018

Aug

ust 2

018

Sep

tem

ber

201

8

Conforming Limit

mclaughlin: fig 2

Source: S&P CoreLogic Case-Shiller Indexes, not seasonally adjusted (November 27, 2018 release)

Ralph McLaughlinDeputy Chief Economist

Ralph McLaughlin holds the title deputy chief economist for CoreLogic in the Office of the Chief Economist. He is responsible for leading economic research using data and analytics to expand the visibility of the CoreLogic economic policy unit while enhancing research capabilities and tools for clients, industry leaders, the public sector and news media.

Home prices in the U.S. grew 5.5 percent in September according to the latest S&P CoreLogic Case-Shiller National Home Price Index. This is the sixth consecutive month of slowing home price growth, which is now at its lowest level since January 2017.

Average home prices for the top 10 metropolitan areas increased 4.8 percent, down from the previous month of 5.2 percent. The top 20 metropolitan areas also posted a gain of 5.1 percent year over year, which is down from 5.5 percent from August 2018. Furthermore, nine of the 20 metropolitan areas reported slower price increases in September 2018 versus the previous month.

Home prices have continued to rise particularly fast in the West of the country, with Las Vegas (13.5 percent), San Francisco (9.9 percent) and Seattle (8.4 percent) accounting for the highest year-over-year price increases.

Despite the continued increase in home price appreciation, it appears that the momentum in housing market is slowing. Observers of the housing market may have noticed other major indicators such as housing starts, new home sales, existing home sales and homebuilder confidence have also trended down over the past few months.

While these trends point to a softening in the housing market, there is little reason for panic. Current housing supply is still low: new and existing housing supply remain well below long-term historical averages. Future housing demand should continue to be robust:

© 2018 CoreLogic — Proprietary. This material may not be reproduced in any form without express written permission. 3

The MarketPulse g December 2018 g Volume 7, Issue 12 | Articles

Smaller Home-Equity Gains Reflect Slowing in Price Growth Borrower Equity Update: Third Quarter 2018

By Molly Boesel

Molly BoeselPrincipal, Economist, Office of the Chief Economist

Molly Boesel holds the title principal, economist for CoreLogic in the Office of the Chief Economist and is responsible for analyzing and forecasting housing and mortgage market trends.

FIGURE 2. AVERAGE AMOUNT OF NEGATIVE EQUITY BY CBSA (Q3 2018)Average Amount of Negative Equity ($)

New York, NYLos Angeles, CA

Chicago, ILWashington, DC

Houston, TX

Denver, CO

Miami, FL

Boston, MA

Las Vegas, NV

San Francisco, CA

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

$800,000

0% 2% 4% 6% 8% 10% 12%

Negative Equity Share

boesel: fig 2

Mean: 1.6%Standard deviation: 5.7%Low appraisals: 9.8%

Leng

th o

f Sta

y

2000 – 2003 Average = 5.8%

Source: CoreLogic Q3 2018

FIGURE 1. 25 STATES WITH THE LARGEST YEAR-OVER-YEAR DECREASES IN NEGATIVE EQUITY SHAREPercentage-Point Change in the Share of Mortgages in Negative Equity from Q3 2017 to Q3 2018

-5.0%

-4.0%

-3.0%

-2.0%

-1.0%

0.0%

NV FL AZ RI OH MD MI IL NJ NH GA VA CA US MA WI ID NM NC SC DE PA NE KS AL MO

boesel: fig 1

Mean: 1.6%Standard deviation: 5.7%Low appraisals: 9.8%

Leng

th o

f Sta

y

Source: CoreLogic Q3 2018

1 CoreLogic began reporting negative equity in Q3 2009.

► National share of homes with negative equity for Q3 2018 was 4.1 percent. ► 81,000 borrowers moved into positive equity from Q3 2017 to Q3 2018. ► Nevada saw the largest improvement in the negative equity share over the past year, falling 4.3 percentage points.

The amount of equity in mortgaged real estate increased by about $775 billion in Q3 2018 from Q3 2017, an annual increase of 9.4 percent, according to the latest CoreLogic Equity Report. The third quarter’s home equity gain was lower than the nearly $1 trillion dollar year-over-year gain in Q2 2018, which reflects slowing price growth.

The nationwide negative equity share for Q3 2018 was 4.1 percent of all homes with a mortgage, more than 20 percentage points lower than the peak negative equity share—26 percent—recorded in Q4 2009.1 Over the past 12 months, 81,000 borrowers moved into positive equity.

Figure 1 shows the 25 states with the largest percentage-point decreases in the negative equity share from the previous year. Nevada’s 4.3-percentage-point decrease in negative equity between Q3 2017 and Q3 2018 represented the nation’s largest year-over-year decline, and the drop from a high of 72.7 percent in Q1 2010 to 4.7 percent in Q3 2018 represented the largest decline from the peak.

Figure 2 shows the average dollar amount of negative equity and the negative equity

share for 10 large Core Based Statistical Areas (CBSAs) in Q3 2018. The average amount of negative equity is inversely related to the negative equity share. For example, in this group of CBSAs, San Francisco has the largest average amount of negative equity, but the negative equity share is only 0.6 percent. Miami has the smallest average amount of negative equity, but has a negative equity share of 11.2 percent, which is nearly three times the national rate. ■

© 2018 CoreLogic — Proprietary. This material may not be reproduced in any form without express written permission.4

Articles | The MarketPulse g December 2018 g Volume 7, Issue 12

The Race to RecoveryThe Alaska Earthquake of Nov 30, 2018

By Tom Larsen

A magnitude (M) 7.0 earthquake struck north of Anchorage, Alaska, on November 30, 2018. Located along the Ring of Fire which sees 81% of the world’s largest earthquakes, Alaska is no stranger to earthquakes. Alaska has experienced several of these devastating earthquakes in the past including the M9.2 in 1964—the largest U.S. earthquake in recorded history.

The damage caused to property is still being assessed. Although the ground motions impact a very large area, the damage is concentrated in close proximity to Anchorage, Alaska’s most populous city. The 2010 census population of Anchorage is approximately 291,000 persons and the population for the encompassing metropolitan area is over 380,000. In the days following the initial earthquake, over 1000 aftershocks were recorded.

Recovery from this earthquake begins with ensuring the integrity of homes as winter approaches. CoreLogic has rapidly cross-referenced the number of units as compared to the ground motion maps the U.S. Geological Survey (USGS) produces. Derived from the USGS ShakeMap (Version 5, November 30, 2018) the number of homes impacted by strong to very strong ground motion is listed in Table 1. While a number of other homes felt shaking from the earthquake, those experiencing MMI VII (very strong ground shaking) are those of most interest as structural damage is typically observed starting with this level of ground motion. Some damage, especially non-structural damage, may also be experienced at the MMI VI level. The housing units affected by this level of intensity are displayed in Table 1 as well.

As more information becomes available, these numbers can be refined. There are

FIGURE 1. AEC SHAKEMAP7 Miles NW of Elmendorf AFB

Source: https://earthquake.usgs.gov/realtime/product/shakemap/ak20419010/ak/1543619279910/download/intensity.jpg (30 Nov 2018)

Tom LarsenPrincipal, Content Strategy

Tom Larsen is a content strategy principal for CoreLogic Insurance and Spatial Solutions. In this role, Tom is responsible for subject matter expertise and thought leadership focused around driving revenue growth and profitability goals via the identification of new solution areas and continuous white space capture.

TABLE 1. PRELIMINARY HOUSING UNITS AFFECTED

Approximate Ground Motion Intensity

Number of Housing Units Affected

MMI VI (Strong Ground Shaking) 97,934

MMI VII (Very Strong Ground Shaking) 28,733

Source: CoreLogic 2018

Continued on page 5

© 2018 CoreLogic — Proprietary. This material may not be reproduced in any form without express written permission. 5

The MarketPulse g December 2018 g Volume 7, Issue 12 | Articles

Race to Recovery continued from page 4

Despite Slowing Home Price Growth continued from page 2

households under the age of 35, which account for the largest pool of potential homebuyers, are starting to show signs

they’re buying homes. Both factors should help long-term investors in the housing market remain confident. ■

FIGURE 3. 20-CITY 2018 ANNUAL GROWTHPercent Growth September 2017–September 2018

0%

2%

4%

6%

8%

10%

12%

14%

Las V

ega

s

San

Fra

ncisc

o

Sea

ttle

Den

ver

Phoe

nix

Tam

pa

Det

roit

Min

nea

pol

is

Atla

nta

Los A

ngel

es US

Cle

vela

nd

Cha

rlotte

Portl

and

Bost

on

Mia

mi

Da

llas

San

Die

go

Chi

cago

Wa

shin

gton

New

Yor

k

Conforming Limit

mclaughlin: fig 3

U.S. 5.5%

Source: S&P CoreLogic Case-Shiller Indexes, not seasonally adjusted (October 30, 2018 release)

In the News

YAHOO! – Dec 17, 2018

The slowing U.S. housing market will have

‘a small silver lining’ in 2019

Home price growth has slowed for six consecutive

months since ... according to the S&P CoreLogic Case-

Shiller national home…

CNBC – Dec 14, 2018

Some of the hottest housing markets

are falling hardest, as bidding wars bid

goodbye

13 percent annually in April, according to the

S&P CoreLogic Case-Shiller Index. That gain was

down to 8... pace for that month in seven years,

according to CoreLogic.

Fortune – Dec 10, 2018

New Reports Provides More Evidence of a

Cooling Housing Market

Research also found that the annual equity gain

decreased from 6.2% in June to 5.4% ... September. “On

average, homeowners saw their home equity increase

again this quarter but…

Bankrate – Dec 4, 2018

Metro areas ranked by affordability,

home price growth

…bouncing back,” says Ralph McLaughlin, deputy chief

economist at CoreLogic. New York, Washington, D.C.,

and Chicago, McLaughlin points…

Dallas News – Dec 4, 2018

New report warns of Dallas home price

bubble

…home price correction in the Dallas area. But other

reports by CoreLogic and Fitch Ratings have said that

North Texas…

several reports of soil failures in the roadways as well, and it is expected that these soil failures may impact residential areas. The 1964 Anchorage earthquake triggered landslides in the neighborhood of Turnagain Heights. The worst damaged areas in 1964 were turned into a park, but damage from this event is not expected to be as severe as the 1964 event.

The CoreLogic Insurance and Spatial Solutions mission is to protect and restore

homes and businesses from financial catastrophe. Knowing the risk that a structure or homeowner faces is essential to recovering quickly. For residents in Alaska, where the average high temperature in December is still below freezing, recovering quickly is critical.

For more information on how to keep up to date on this event and other catastrophes, visit our catastrophe insight and response site Hazard HQ™. ■

© 2018 CoreLogic — Proprietary. This material may not be reproduced in any form without express written permission.8

Analysis | The MarketPulse g December 2018 g Volume 7, Issue 12

“Rising prices and interest rates have reduced home buyer activity and led to a gradual slowing in appreciation. October’s mortgage rates were the highest in seven and a half years, eroding buyer affordability. Despite higher interest rates, many renters view a home purchase as a way to build wealth through home-equity growth, especially in areas where rents are rising quickly. These include the Phoenix, Las Vegas and Orlando metro areas, where the CoreLogic Single-Family Rent Index rose 6 percent or more during the last 12 months.”

Dr. Frank Nothaft,

chief economist for CoreLogic

Home Price Index State-Level Detail — Combined Single Family Including Distressed October 2018

StateMonth-Over-Month

Percent ChangeYear-Over-Year Percent Change

Forecasted Month-Over-Month

Percent Change

Forecasted Year-Over-Year Percent Change

Alabama 0.9% 4.9% 0.3% 5.7%Alaska 0.2% 2.4% 0.4% 6.3%

Arizona 0.9% 7.9% 0.4% 6.5%Arkansas 0.5% 2.7% 0.2% 5.0%

California −0.1% 5.9% 0.0% 8.4%Colorado 0.2% 7.3% 0.3% 4.5%

Connecticut −0.5% 1.1% 0.3% 7.3%Delaware −0.6% 0.3% 0.1% 4.5%

District of Columbia 0.1% 2.9% 0.2% 4.4%Florida 0.4% 5.4% 0.4% 7.2%

Georgia 0.3% 6.6% 0.3% 5.3%Hawaii −0.1% 3.5% 0.1% 6.5%Idaho 0.4% 12.0% 0.2% 3.7%Illinois −0.1% 3.3% 0.3% 6.6%

Indiana −0.1% 6.3% 0.3% 6.0%Iowa 0.0% 3.3% 0.2% 5.6%

Kansas 0.0% 5.2% 0.2% 5.2%Kentucky 0.3% 4.8% 0.2% 5.0%Louisiana −0.2% 0.1% 0.1% 2.9%

Maine 0.0% 4.4% 0.4% 6.8%Maryland 0.0% 2.6% 0.2% 4.8%

Massachusetts 0.2% 5.7% 0.2% 6.3%Michigan 0.3% 6.5% 0.3% 6.8%

Minnesota −0.2% 5.7% 0.2% 5.1%Mississippi −1.1% 0.8% 0.3% 4.7%

Missouri 0.6% 5.9% 0.2% 5.7%Montana 0.2% 4.5% 0.2% 3.9%Nebraska 0.0% 5.3% 0.1% 4.9%

Nevada 0.2% 12.1% 0.2% 8.7%New Hampshire −0.6% 5.6% 0.3% 7.1%

New Jersey 0.0% 3.0% 0.3% 6.3%New Mexico 0.7% 4.6% 0.5% 4.4%

New York 1.5% 5.5% 0.4% 6.1%North Carolina 0.3% 5.2% 0.3% 5.2%North Dakota −0.3% −1.2% 0.1% 4.6%

Ohio 0.1% 5.6% 0.2% 5.3%Oklahoma 0.1% 2.4% 0.2% 4.3%

Oregon −0.2% 6.0% 0.2% 7.5%Pennsylvania −0.4% 3.8% 0.1% 5.7%Rhode Island 0.5% 5.6% 0.3% 5.6%

South Carolina 0.0% 5.1% 0.2% 5.6%South Dakota 0.3% 0.6% 0.1% 4.6%

Tennessee 0.4% 5.9% 0.3% 4.5%Texas −0.4% 4.6% 0.1% 2.6%Utah 0.4% 9.7% 0.3% 5.0%

Vermont 0.6% 3.9% 0.7% 5.8%Virginia −0.3% 2.6% 0.2% 5.2%

Washington −0.1% 8.0% 0.1% 5.7%West Virginia −0.1% 10.1% 0.1% 5.5%

Wisconsin 0.2% 5.7% 0.3% 5.5%Wyoming 0.2% 4.2% 0.1% 3.4%

Source: CoreLogic October 2018

10 Largest CBSA — Loan Performance Insights Report September 2018

CBSA

30 Days or More Delinquency Rate

September 2018 (%)

Serious Delinquency Rate

September 2018 (%)Foreclosure Rate

September 2018 (%)

30 Days or More Delinquent Rate

September 2017 (%)

Serious Delinquency Rate

September 2017 (%)Foreclosure Rate

September 2017 (%)

Boston-Cambridge-Newton MA-NH 3.6 1.1 0.3 3.8 1.4 0.5

Chicago-Naperville-Elgin IL-IN-WI 4.7 1.8 0.6 5.2 2.3 0.9

Denver-Aurora-Lakewood CO 1.9 0.4 0.1 2.0 0.6 0.1

Houston-The Woodlands-Sugar Land TX 5.7 2.1 0.3 10.6 2.1 0.3

Las Vegas-Henderson-Paradise NV 3.9 1.7 0.6 4.5 2.3 0.8

Los Angeles-Long Beach-Anaheim CA 2.7 0.7 0.2 2.9 0.9 0.2

Miami-Fort Lauderdale-West Palm Beach FL 6.1 2.9 1.0 9.6 3.1 0.9

New York-Newark-Jersey City NY-NJ-PA 6.0 3.0 1.4 6.9 3.9 2.0

San Francisco-Oakland-Hayward CA 1.6 0.4 0.1 1.8 0.6 0.1

Washington-Arlington-Alexandria DC-VA-MD-WV 3.8 1.3 0.4 4.2 1.7 0.5

Source: CoreLogic September 2018

© 2018 CoreLogic — Proprietary. This material may not be reproduced in any form without express written permission. 9

The MarketPulse g December 2018 g Volume 7, Issue 12 | Analysis

OVERVIEW OF LOAN PERFORMANCENational Delinquency Rates

Source: CoreLogic September 2018

4.4

2.2

0.7

0.3

1.0 1.2

0.5

5.0

2.4

0.7 0.4

1.3 1.5

0.6

0.0

1.0

2.0

3.0

4.0

5.0

6.0

30+ days 30 to 59 days 60 to 89 days 90 to 119 days 90+ days (not infcl)

120+ days In Foreclosure

Perc

enta

ge R

ate

September 2017

September 2018

2.61x5.11 / 2.69x4.98loan performance sept 2018: national overview

90-119 DaysPast Due

120+ DaysPast Due

60-89 DaysPast Due

30-59 DaysPast Due

30 Days or MorePast Due

90+ Days(not in fcl)

HOME PRICE INDEXPercentage Change Year Over Year

Source: CoreLogic October 2018

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Including Distressed

2.58x4.99hpi as of oct 2018

Charts & Graphs

“Outside of areas affected by natural disasters, serious delinquency and foreclosure rates have declined steadily across the nation as the labor market has improved and home prices have risen. However, we have also seen a rise in high loan-to-value and high debt-to-income lending in our CoreLogic TrueStandings data, heightening the risk of a significant upturn in loan default if the economy slips into recession or home prices decline.”

Frank Martell,

president and CEO of CoreLogic

© 2018 CoreLogic — Proprietary. This material may not be reproduced in any form without express written permission.10

Analysis | The MarketPulse g December 2018 g Volume 7, Issue 12

Legend

Normal

Overvalued

Undervalued

CORELOGIC HPI® MARKET CONDITION OVERVIEWOctober 2018

Source: CoreLogic CoreLogic HPI Single Family Combined Tier, data through October 2018. CoreLogic HPI Forecasts Single Family Combined Tier, starting in November 2018.

Legend

Normal

Overvalued

Undervalued

CORELOGIC HPI® MARKET CONDITION OVERVIEWOctober 2023 Forecast

Source: CoreLogic CoreLogic HPI Single Family Combined Tier, data through October 2018. CoreLogic HPI Forecasts Single Family Combined Tier, starting in November 2018.

© 2018 CoreLogic — Proprietary. This material may not be reproduced in any form without express written permission. 11

The MarketPulse g December 2018 g Volume 7, Issue 12 | Analysis

MAP OF AVERAGE YEAR-OVER-YEAR EQUITY GAIN PER BORROWERAs of Q3 2018

Vermont and South Dakota have insufficient equity data to report. Source: CoreLogic Q3 2018

$27K

$37K

$33K

$21K

$16K

$18K

$14K $19K$21K

$27K

$9K

$37K

$33K

$21K

$16K$5K

$18K

$8K

$7K –$11K

$7K

$8K

$2K

$8K–$4K

$3K

$7K

$1K

$11K

$8K

$6K

$9K

$8K$9K

$5K

$9K

$8K $5K $11K

$10K

$8K

$9K

$5K$7K

$7K

$14K

$14K

$19K

$1K

$18K

$3K$5K

$6K

$8K

–$400K$14K

$14K$21K

“The number of homes in a negative equity position have remained around 2.2 million for two consecutive quarters this year. Without equity, those homeowners are unable to sell their homes and are more likely to transition from delinquency to foreclosure if they face financial distress.”

Frank Martell,

president and CEO of CoreLogic

NATIONAL HOME EQUITY DISTRIBUTIONBy LTV Segment

Source: CoreLogic Q2 2018

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

50%

to 5

4%

55%

to 5

9%

60%

to 6

4%

65%

to 6

9%

70%

to 7

4%

75%

to 7

9%

80%

to 8

4%

85%

to 8

9%

90%

to 9

4%

95%

to 9

9%

100%

to 1

04%

105%

to 1

09%

110%

to 1

14%

115%

to 1

19%

120%

to 1

24%

125%

+

Loan-to-Value Ratio

2.81x5.2q2 equity as of q2 2018

Including Distressed

Q1 2018

Q2 2018

© 2018 CoreLogic — Proprietary. This material may not be reproduced in any form without express written permission.12

Analysis | The MarketPulse g December 2018 g Volume 7, Issue 12

Variable Descriptions

Variable Definition

Total Sales The total number of all home-sale transactions during the month.

Total Sales 12-Month sum The total number of all home-sale transactions for the last 12 months.

Total Sales YoY Change 12-Month sum

Percentage increase or decrease in current 12 months of total sales over the prior 12 months of total sales

New Home Sales The total number of newly constructed residentail housing units sold during the month.

New Home Sales Median Price The median price for newly constructed residential housing units during the month.

Existing Home Sales The number of previously constucted homes that were sold to an unaffiliated third party. DOES NOT INCLUDE REO AND SHORT SALES.

REO Sales Number of bank owned properties that were sold to an unaffiliated third party.

REO Sales Share The number of REO Sales in a given month divided by total sales.

REO Price Discount The average price of a REO divided by the average price of an existing-home sale.

REO Pct The count of loans in REO as a percentage of the overall count of loans for the reporting period.

Short Sales The number of short sales. A short sale is a sale of real estate in which the sale proceeds fall short of the balance owed on the property's loan.

Short Sales Share The number of Short Sales in a given month divided by total sales.

Short Sale Price Discount The average price of a Short Sale divided by the average price of an existing-home sale.

Short Sale Pct The count of loans in Short Sale as a percentage of the overall count of loans for the month.

Distressed Sales Share The percentage of the total sales that were a distressed sale (REO or short sale).

Distressed Sales Share (sales 12-Month sum)

The sum of the REO Sales 12-month sum and the Short Sales 12-month sum divided by the total sales 12-month sum.

HPI MoM Percent increase or decrease in HPI single family combined series over a month ago.

HPI YoY Percent increase or decrease in HPI single family combined series over a year ago.

HPI MoM Excluding Distressed

Percent increase or decrease in HPI single family combined excluding distressed series over a month ago.

HPI YoY Excluding Distressed Percent increase or decrease in HPI single family combined excluding distressed series over a year ago.

HPI Percent Change from Peak

Percent increase or decrease in HPI single family combined series from the respective peak value in the index.

90 Days + DQ Pct The percentage of the overall loan count that are 90 or more days delinquent as of the reporting period. This percentage includes loans that are in foreclosure or REO.

Stock of 90+ Delinquencies YoY Chg Percent change year-over-year of the number of 90+ day delinquencies in the current month.

Foreclosure Pct The percentage of the overall loan count that is currently in foreclosure as of the reporting period.

Percent Change Stock of Foreclosures from Peak

Percent increase or decrease in the number of foreclosures from the respective peak number of foreclosures.

Pre-foreclosure Filings The number of mortgages where the lender has initiated foreclosure proceedings and it has been made known through public notice (NOD).

Completed ForeclosuresA completed foreclosure occurs when a property is auctioned and results in either the purchase of the home at auction or the property is taken by the lender as part of their Real Estate Owned (REO) inventory.

Negative Equity Share The percentage of mortgages in negative equity. The denominator for the negative equity percent is based on the number of mortgages from the public record.

Negative Equity

The number of mortgages in negative equity. Negative equity is calculated as the difference between the current value of the property and the origination value of the mortgage. If the mortgage debt is greater than the current value, the property is considered to be in a negative equity position. We estimate current UPB value, not origination value.

Months' Supply of Distressed Homes (total sales 12-Month avg)

The months it would take to sell off all homes currently in distress of 90 days delinquency or greater based on the current sales pace.

Price/Income Ratio CoreLogic HPI™ divided by Nominal Personal Income provided by the Bureau of Economic Analysis and indexed to January 1976.

Conforming Prime Serious Delinquency Rate

The rate serious delinquency mortgages which are within the legislated purchase limits of Fannie Mae and Freddie Mac. The conforming limits are legislated by the Federal Housing Finance Agency (FHFA).

Jumbo Prime Serious Delinquency Rate

The rate serious delinquency mortgages which are larger than the legislated purchase limits of Fannie Mae and Freddie Mac. The conforming limits are legislated by the Federal Housing Finance Agency (FHFA).

© 2018 CoreLogic — Proprietary. This material may not be reproduced in any form without express written permission. 13

The MarketPulse g December 2018 g Volume 7, Issue 12 | Analysis

corelogic.com

End Notes | The MarketPulse g December 2018 g Volume 7, Issue 12

© 2018 CoreLogic, Inc. All rights reserved.

CORELOGIC, the CoreLogic logo, CORELOGIC HPI, CORELOGIC CASE_SHILLER INDEXES and HAZARD HQ are trademarks of CoreLogic, Inc. and/or its subsidiaries. All other trademarks are the property of their respective holders.

17-MKTPLSE-1218-00

Source: CoreLogicThe data provided is for use only by the primary recipient or the primary recipient's publication or broadcast. This data may not be re-sold, republished or licensed to any other source, including publications and sources owned by the primary recipient's parent company without prior written permission from CoreLogic. Any CoreLogic data used for publication or broadcast, in whole or in part, must be sourced as coming from CoreLogic, a data and analytics company. For use with broadcast or web content, the citation must directly accompany first reference of the data. If the data is illustrated with maps, charts, graphs or other visual elements, the CoreLogic logo must be included on screen or website. For questions, analysis or interpretation of the data, contact CoreLogic at newsmedia@corelogic.com. Data provided may not be modified without the prior written permission of CoreLogic. Do not use the data in any unlawful manner. This data is compiled from public records, contributory databases and proprietary analytics, and its accuracy is dependent upon these sources.

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