The MarketPulse MARCH The MarketPulse g March 2018 g Volume 7, Issue 3

Transcription

1 The MarketPulse g March 2018 g Volume 7, Issue 3 The MarketPulse MARCH 2018 i 2018 CoreLogic Proprietary. This material may not be reproduced in any form without express written permission.

2 Table of Contents The MarketPulse g March 2018 g Volume 7, Issue 3 The MarketPulse Volume 7, Issue 3 March 2018 Data as of January (unless otherwise stated) Housing Statistics January 2018 HPI YOY Chg 6.6% HPI YOY Chg XD 5.9% NegEq Share (Q4 2017) 6.3% Cash Sales Share (as of January 2017) 36.5% Table of Contents Home-Equity Wealth Increase in 2017 Was Largest in Four Years...1 Average homeowner gained $15,100 in home-equity during 2017 PLRMBS Issuance: Resurgence?... 2 A Closer Look at the Private Label Lending Product U.S. Single-Family Rents Up 2.8 Percent Year Over Year in December.3 San Diego Had the Highest Year-Over-Year Rent Growth in December Distressed Sales (as of January 2017) 7.0% Rise in Typical Mortgage Payment Homebuyers Face This Year Could Far Outpace Price Gains... 4 Forecasted Mortgage Rate Increases Translate Into Payments Rising About Three Times as Fast as Home Prices In the News Largest CBSA Loan Performance Insights Report December Home Price Index State-Level Detail Combined Single Family Including Distressed January Home Price Index... 8 Overview of Loan Performance... 8 CoreLogic HPI Market Condition Overview... 9 January 2018 January 2023 Forecast National Home Equity Distribution...10 Map of Average Year-Over-Year Equity Gain per Borrower...10 Variable Descriptions News Media Contact Alyson Austin alaustin@corelogic.com (office) ii 2018 CoreLogic Proprietary. This material may not be reproduced in any form without express written permission.

3 The MarketPulse g March 2018 g Volume 7, Issue 3 Articles Home-Equity Wealth Increase in 2017 Was Largest in Four Years Average homeowner gained $15,100 in home-equity during 2017 By Frank E. Nothaft Home equity the difference between the value of a home and the amount of mortgage debt on the home is an important component of overall household wealth. Changes in the amount of homeequity wealth will be primarily affected by growth in home values and pay down of mortgage loan balances. For the last few years, home-value appreciation has been the major creator of wealth. During 2017, the national CoreLogic Home Price Index rose by more than 6 percent, the largest annual increase since Likewise, homeequity wealth rose more in 2017 than any other year since The latest CoreLogic Equity Report found that the average homeowner gained about $15,000 in home-equity wealth during 2017, with larger gains in areas that were high-cost and had faster appreciation. For example, the average home owner in California and Washington had a wealth gain of about $40,000, reflecting the high price of homes in California and the rapid appreciation in Washington. (Exhibit 1) In contrast, the average owner in Louisiana had little change in their housing wealth, given the much lower prices and more modest price growth. equity wealth gain of $15,000 should lead to an additional $750 in consumption spending per household over the next couple years, or about $56 billion of additional spending summed up across all homeowners. 1 Consumer spending is more likely to experience a wealth effect from increases in wealth that are viewed as more permanent. For this reason, the effect on consumption may be stronger for home equity wealth than for stock equities because families view gains in home equity wealth as more permanent, whereas gains (or losses) in stock market wealth may be seen as more transitory. For example, since 1970 home-equity wealth has been one-third less variable than corporate equity values, measured quarterly. 2 Because of the effect home-equity wealth has on consumption spending, these gains in wealth will support further economic growth this year and next. Dr. Frank Nothaft Executive, 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. 1 Macroeconomic Adviser by IHS Markit has estimated a long-run marginal propensity to consume from an increase in wealth of about 5 percent, implying a $15,000 increase in wealth will lead to a $750 increase in consumption spending per homeowner over time. The American Community Survey reported about 75 million homeowners during 2016, implying about $56 billion in aggregate spending. FIGURE 1. AVERAGE EQUITY GAIN PER HOMEOWNER IN 2017 U.S. Average $15,100 per home 2 From the first quarter of 1970 to the third quarter of 2017, the market value of corporate equities had gained an average 2.2 percent per quarter with a standard deviation of 9.6 percent. In comparison, aggregate home equity had grown 1.8 percent per quarter with a standard deviation of 2.9 percent, one-third less variable than stock market gains. (Source: Federal Reserve Board, Financial Accounts of the United States, Statistical Release Z.1, series LM and FL ) Higher wealth spurs additional consumption $40k spending. While estimates vary, IHS Markit $11k analysis indicates that an average home- $17k $27k $44k $21k $27k $16k $21k $9k $12k $9k $6k $11k $6k $10k $23k $12k $11k $10k $13k $20k $4k Legend Q to Q Average Equity Gain $13k $5k $2k $5k $11k $4k $11k $10k More than $20,000 $10,000 $20,000 $3k $9k $0k Up to $10,000 $12k $0 or Below Insufficient Data $18k Vermont, West Virginia, Maine, Mississippi, South Dakota have insufficient equity data to report. Source: CoreLogic Equity Report for 2017 Q CoreLogic Proprietary. This material may not be reproduced in any form without express written permission. 1

4 Articles The MarketPulse g March 2018 g Volume 7, Issue 3 PLRMBS Issuance: Resurgence? A Closer Look at the Private Label Lending Product By Patrick Kiser Patrick Kiser Principal, Mortgage Performance Solutions Patrick Kiser is currently a product principal within the Mortgage Performance Solutions group at CoreLogic providing data and analytics to the contributed servicing and non-agency RMBS products for government agencies and other market participants. While issuance volumes are nowhere near pre-crisis levels, the Private Label Residential Mortgage Backed Securities (PLRMBS) market has continued to provide access to funding for mortgage loans that don t conform to the current tight credit markets. We observe a cycle starting in 2009 where a limited number of PLRMBS issues have made it to market through 144A rule offerings with deal volumes by vintage and origination amounts by vintage both peaking in 2017 (as of December 2017 remittance). The collateral reveals the overwhelming tendency is to issue BC/Subprime deals that tend to revolve around NPL/RPL loans. These deals could include NPL/ RPL portfolios being securitized from GSE auction purchases as well. Likewise, we see several legacy PLRMBS deals being called and the remaining outstanding loans re-securitized into new 144A issues. In more recent vintages starting in 2014, we re starting to also see the emergence of a limited number of non-qm loans being included to some deals. FIGURE 1. PLRMBS VINTAGE Deal Count Issuer wise, the diversification has been significant. No less than 55 firms from 2009 to date have issued into the PLRMBS segment. However, roughly 50% of all deals issued during this time have been issued by only 5 issuers: Bayview, Sequoia, Credit Suisse, JPMorgan and Towd Point Source: CoreLogic FIGURE 2. PLRMBS BY VINTAGE Close Balance $60,000,000,000 While the deal volumes are not comparable to pre-crisis there has been a slow but gradual resurgence the last few years. If 2015 to the present is any indication, we can expect a continued growth trend and have already reached $50B in closing balances for Going into 2018, there should be continued interest in securitizing NPL /RPL loans and further defining the evolving non- QM credit box. The question mark is with respect to the public side and whether or not we ll see issuance under Reg AB II. Continued on page 6 $50,000,000,000 $40,000,000,000 MBS/Prime $30,000,000,000 BC/Subprime ALT A $20,000,000,000 $10,000,000,000 $0 Source: CoreLogic CoreLogic Proprietary. This material may not be reproduced in any form without express written permission.

5 The MarketPulse March 2018 Volume 7, Issue 3 Articles U.S. Single-Family Rents Up 2.8 Percent Year Over Year in December San Diego Had the Highest Year-Over-Year Rent Growth in December By Shu Chen High-end segment growth accelerated in December 2017 compared with December 2016 Houston rent growth remains strong due to Hurricane Harvey Of 20 metros analyzed, only Honolulu experienced a year-over-year decrease in singlefamily rents in December Single-family rents climbed steadily between 2010 and 2017, as measured by the CoreLogic Single-Family Rental Index (SFRI). However, the index shows yearover-year rent growth has decelerated slowly (Figure 1) since it peaked early last year. In December 2017, single-family rents increased 2.8 percent year over year, a 1.4-percentage-point decline since the growth rate hit a high of 4.2 percent in February The index measures rent changes among single-family rental homes, including condominiums, using a repeatrent analysis to measure the same rental properties over time. 3.9 percent year over year in December 2017, down from a gain of 4.9 percent in December Rent growth varies significantly across metro areas 1. Figure 2 shows the year-overyear change in the rental index for 20 large Con nued on page 6 1 Metro areas used in this report are Core Based Statistical Areas. The SFRI is computed for 75 CBSAs. FIGURE 1. NATIONAL SINGLE-FAMILY RENTAL INDEX YEAR-OVER-YEAR PERCENT CHANGE 8.0% 6.0% 4.0% Shu Chen Principal, Economist, Office of the Chief Economist Shu Chen holds the title principal, economist for the CoreLogic information solutions group. In this role, she is part of the Office of the Chief Economist working with senior economists to provide insights for the Home Price Index, foreclosure reports and she regularly performs analysis of the home value equity report. Using the index to analyze specific price tiers reveals important differences. Figure 1 shows that the index s overall growth in December 2017 was pulled down by the high-end rental market, defined as properties with rents 125 percent or more of a region s median rent. Rents on higherpriced rental homes increased 2.5 percent year over year in December 2017, up from a gain of 1.5 percent in December Rents in the low-end market, defined as properties with rents less than 75 percent of the regional median rent, increased 2.0% 0.0% -2.0% -4.0% -6.0% Jan-05 May-05 Sep-05 Jan-06 May-06 Sep-06 Jan-07 May-07 Sep-07 Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17 SFRI Low Tier High Tier Source: CoreLogic Single-Family Rent Index, December 2017 FIGURE 2. SINGLE-FAMILY RENT INDEX YEAR-OVER-YEAR PERCENT CHANGE IN 20 MARKETS 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% -1.0% -2.0% San Diego, CA Las Vegas, NV Phoenix, AZ Atlanta, GA Tucson, AZ Orlando, FL Charlotte, NC Seattle, WA Los Angeles, CA Houston, TX Washington, DC Detroit, MI Dallas, TX Boston, MA Philadelphia, PA Chicago, IL Austin, TX St. Louis, MO Miami, FL Honolulu, HI Dec-17 Source: CoreLogic Single-Family Rent Index, December 2017 Dec CoreLogic Proprietary. This material may not be reproduced in any form without express written permission. 3

6 Articles The MarketPulse g March 2018 g Volume 7, Issue 3 Rise in Typical Mortgage Payment Homebuyers Face This Year Could Far Outpace Price Gains Forecasted Mortgage Rate Increases Translate Into Payments Rising About Three Times as Fast as Home Prices By Andrew LePage 1 Based on the average mortgage rate forecast from Freddie Mac, Fannie Mae, Mortgage Bankers Association, National Association of Realtors, National Association of Home Builders and IHS Markit. Andrew LePage Research Analyst Andrew LePage joined CoreLogic in 2015 as a research analyst working in the Office of the Chief Economist. Previously, Andrew was an analyst and writer for DQNews, a partner of DataQuick (acquired by CoreLogic in 2014). Andrew provided real estate data and trend analysis to journalists and issued a variety of housing market reports to the news media on behalf of DataQuick. Prior to that he was a staff writer at the Sacramento Bee newspaper covering residential real estate topics in the capital region and across California. He continues to monitor California s housing market for CoreLogic in two monthly data briefs detailing trends in Southern California and the San Francisco Bay Area. The CoreLogic Home Price Index Forecast suggests U.S. home prices will rise by about 5 percent this year, but some mortgage rate forecasts mean the mortgage payments homebuyers face could increase closer to 16 percent. One way to measure the impact of inflation, mortgage rates and home prices on affordability over time is to use what we call the typical mortgage payment. It s a mortgage-rate-adjusted monthly payment based on each month s U.S. median home sale price. It is calculated using Freddie Mac s average rate on a 30-year fixed-rate mortgage with a 20 percent down payment. It does not include taxes or insurance. The typical mortgage payment is a good proxy for affordability because it shows the monthly amount that a borrower would have to qualify for in order to get a mortgage to buy the median-priced U.S. home. A consensus forecast 1 suggests mortgage rates will rise by about 0.82 percentage points, or 82 basis points, between December 2017 and December The CoreLogic HPI Forecast suggests the median sale price will rise 3.4 percent in real terms over the same period (or 5.1 percent in nominal terms). Based on these projections, the inflation-adjusted typical mortgage payment would rise from $800 in December 2017 to $911 by December 2018, a 13.9 percent year-overyear gain (Figure 1). In nominal terms the typical mortgage payment s year-over-year gain would be 15.8 percent. An IHS Markit forecast calls for real disposable income to rise by roughly 4 percent this year, meaning homebuyers would see a larger chunk of their incomes devoted to mortgage payments. Continued on page 5 FIGURE 1. COMPARING MTG RATES TO THE YR/YR CHNG IN THE REAL MEDIAN PRICE & TYPICAL MTG PMT YoY % Change in Real Median Price and Real Typical Mtg Pmt Monthly Avg Rate for 30-Yr Fixed-Rate Mtg 30% 20% Dec-18: 13.9% Forecast % 5 0% 4-10% Dec-17: % 1-30% 0 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Avg 30-year Mtg Rate YoY Change in Real Median$ YoY Change in Real Typical Mtg Pmt Source: CoreLogic s Real Estate Analytics Suite, Bureau of Labor Statistics, Freddie Mac (for current and past mortgage rates), IHS Markit (for CPI forecast) and IHS, Freddie Mac, Fannie Mae, National Association of Home Builders, Mortgage Bankers Association and National Association of Realtors for averaging mortgage rate forecasts. Chart forecast period begins Jan CoreLogic Proprietary. This material may not be reproduced in any form without express written permission.

7 The MarketPulse g March 2018 g Volume 7, Issue 3 Articles Rise in "Typical Mortgage Payment" continued from page 4 In the News Dallas Morning News, March 13, 2018 Texas storms, California fires push up U.S. late home loans In Texas 6.8 percent of home loans were behind by at least one month in payments. That s ahead of the national rate of 5.3 percent, according to CoreLogic. When adjusted for inflation the typical mortgage payment puts homebuyers current costs in the proper historical context. Figure 2 shows that while the inflationadjusted typical mortgage payment has trended higher in recent years, in December 2017 it remained 36.8 percent below the all-time peak of $1,265 in June That s because the average mortgage rate back in June 2006 was about 6.7 percent, compared with an average rate of just under 4 percent in December 2017, and the inflation-adjusted U.S. median sale price in June 2006 was $245,576 (or $199,900 in 2006 dollars), compared with a December 2017 median of $210,767. some mortgage rate forecasts mean the mortgage payments homebuyers face could increase closer to 16 percent. Mortgage Orb, March 14, 2018 CoreLogic: Storms, Wildfires Dented Loan Performance in December Roughly 5.3% of mortgages were in some stage of delinquency in December 2017, flat compared with December 2016, according to CoreLogic s monthly Loan Performance Insights Report. CNBC, March 15, 2018 Homeowners gained an average of $15,000 in home equity last year or $908 billion in total Homeowners with a mortgage, representing about 63 percent of all properties, saw their equity increase 12 percent over the course of last year, according to CoreLogic. That comes to an average of $15,000 per homeowner and a collective gain of $908.4 billion. Realtor Magazine, March 16, 2018 Homeowners Keep Getting Richer and Richer Home-price growth has been the primary driver of home-equity wealth creation, says Frank Nothaft, chief FIGURE 2. NATIONAL HOMEBUYERS TYPICAL MORTGAGE PAYMENT Inflation-Adjusted Monthly Mortgage Payment That Buyers Commit To $1,400 $1,200 Jun-06, $1,265 Dec-18, $911 economist for CoreLogic. Because wealth gains spur additional consumer purchases, the rise in homeequity wealth during 2017 should add more than $50 billion to U.S. consumption spending over the next two to three years. $1,000 Dec-17, $800 Dec-16, $793 Albuquerque Journal, March 19, 2018 Hurricane impact lessens as mortgage delinquencies drop $800 $600 The typical mortgage payment used for this chart represents the inflation-adjusted monthly payment based on each month s U.S. median sale price and assumes a 20 percent down payment, a fixed-rate 30-year mortgage, and Freddie Mac s average monthly rate. It does not include taxes or insurance. Meanwhile, many houses bought at bargain prices during the Great Recession went to investors who use them for rental income. And some owners can t sell their homes because they re still underwater after the recession 2.5 million people owe more Feb-12, $552 $400 Jan-00 Jan-06 Jan-12 Jan-18 Source: CoreLogic s Real Estate Analytics Suite, Bureau of Labor Statistics, Freddie Mac (for current and past mortgage rates), IHS Markit (for CPI forecast) and IHS, Freddie Mac, Fannie Mae, National Association of Home Builders, Mortgage Bankers Association and National Association of Realtors for averaging mortgage rate forecasts. Chart forecast period begins Jan-18. on their mortgages than their homes are worth, according to CoreLogic, a company that researches the real estate market CoreLogic Proprietary. This material may not be reproduced in any form without express written permission. 5

8 Articles The MarketPulse g March 2018 g Volume 7, Issue 3 PLRMBS continued from page 2 FIGURE 3. PLRMBS COLLATERAL PROFILE LOAN COUNT BY VINTAGE , ,000 In our next installment, we ll take a look at the traits and relative performance on the book of issued PLMBS deals between 2009 to date. 250, , , ,000 50, Source: CoreLogic ALT A BC/Subprime MBS/Prime U.S. Single-Family Rents continued from page 3 FIGURE 3. RENT GROWTH VS. VACANCY RATE IN 35 MARKETS 2017 Rental Vacancy Rate 11% 10% Oklahoma City Houston stopped in October 2017 after 17 months of declines. Houston year-overyear rent growth in December 2017 was 2.8 percent, up 4.6 percentage points from December % 8% 7% 6% St. Louis Chicago, IL Rental vacancy rates are available quarterly from the U.S. Census Bureau Housing Vacancy Survey. Figure 3 shows the relationship between the rent growth and rental vacancy rates for 35 metro areas that are available for both CoreLogic s rental index and the Census s vacancy survey in % 4% San Diego San Francisco Seattle 3% 0% 1% 2% 3% 4% 5% Rent Growth ( Q to Q4 2017) Source: CoreLogic Single-Family Rent Index, December 2017 metro areas in December San Diego had the highest year-over-year rent growth in December with an increase of 5.7 percent. Only one of the metro areas showed a decrease in the rent index, with Honolulu, Hawaii posting a decline of 2 percent. The December 2017 results for Houston are notable. Impacted by Hurricane Harvey, the year-over-year rent index decrease in Metro areas with limited new construction and strong local economies that attract new employees tend to have low rental vacancy rates and stronger rent growth. Seattle had a rental vacancy rate of 3.4 percent and experienced 4.3 percent year-over-year rent growth in Q4 2017, driven by employment growth of 3.1 percent year over year, which more was more than double national growth of 1.5 percent. In contrast, St. Louis and Chicago, where employment growth were both 0.7 percent, half of the national growth in Q4 2017, experienced 0.8 percent and 1 percent year-over-year rent growth, according to CoreLogic data, and had vacancy rates of 8 percent and 7 percent, respectively CoreLogic Proprietary. This material may not be reproduced in any form without express written permission.

9 The MarketPulse g March 2018 g Volume 7, Issue 3 Analysis 10 Largest CBSA Loan Performance Insights Report December 2017 CBSA 30 Days or More Delinquency Rate December 2017 (%) Serious Delinquency Rate December 2017 (%) Foreclosure Rate December 2017 (%) 30 Days or More Delinquent Rate December 2016 (%) Serious Delinquency Rate December 2016 (%) Foreclosure Rate December 2016 (%) Boston-Cambridge-Newton MA-NH Chicago-Naperville-Elgin IL-IN-WI Denver-Aurora-Lakewood CO Houston-The Woodlands-Sugar Land TX Las Vegas-Henderson-Paradise NV Los Angeles-Long Beach-Anaheim CA Miami-Fort Lauderdale-West Palm Beach FL New York-Newark-Jersey City NY-NJ-PA San Francisco-Oakland-Hayward CA Washington-Arlington-Alexandria DC-VA-MD-WV Source: CoreLogic December 2017 Home Price Index State-Level Detail Combined Single Family Including Distressed January 2018 State Month-Over-Month Percent Change Year-Over-Year Percent Change Forecasted Month-Over-Month Percent Change Forecasted Year-Over-Year Percent Change Alabama 0.5% 5.1% 0.3% 5.3% Alaska 0.3% 0.7% 0.3% 5.7% Arizona 0.5% 6.4% 0.3% 6.4% Arkansas 0.2% 4.0% 0.3% 4.7% California 0.2% 8.3% 0.5% 10.2% Colorado 0.8% 8.3% 0.4% 5.7% Connecticut 0.6% 1.7% 0.2% 6.6% Delaware 1.1% 0.7% 0.2% 4.1% District of Columbia 0.6% 1.5% 0.1% 3.9% Florida 0.3% 5.6% 0.3% 7.2% Georgia 0.5% 6.5% 0.2% 4.2% Hawaii 0.1% 4.1% 0.3% 5.9% Idaho 0.1% 10.3% 0.3% 4.3% Illinois 0.1% 3.7% 0.2% 5.6% Indiana 0.5% 5.8% 0.3% 5.5% Iowa 0.4% 3.7% 0.1% 4.7% Kansas 0.5% 5.1% 0.1% 4.5% Kentucky 0.1% 5.6% 0.1% 4.3% Louisiana 0.3% 6.0% 0.1% 3.0% Maine 0.2% 8.1% 0.6% 6.6% Maryland 0.3% 3.4% 0.1% 4.4% Massachusetts 0.3% 6.1% 0.2% 5.6% Michigan 0.4% 7.3% 0.2% 6.5% Minnesota 0.1% 6.0% 0.2% 4.2% Mississippi 0.8% 3.3% 0.0% 3.3% Missouri 0.1% 4.8% 0.2% 5.3% Montana 0.9% 8.4% 0.1% 4.1% Nebraska 0.0% 5.4% 0.2% 4.3% Nevada 0.6% 11.3% 0.4% 8.7% New Hampshire 0.5% 5.0% 0.0% 5.8% New Jersey 0.6% 2.2% 0.4% 5.8% New Mexico 0.2% 4.3% 0.1% 4.3% New York 2.9% 5.7% 0.7% 5.7% North Carolina 0.2% 5.5% 0.2% 4.1% North Dakota 0.3% 5.5% 0.2% 2.6% Ohio 0.0% 6.2% 0.1% 4.7% Oklahoma 0.3% 2.0% 0.1% 3.4% Oregon 0.3% 6.8% 0.3% 7.1% Pennsylvania 0.3% 3.5% 0.1% 5.0% Rhode Island 0.1% 8.4% 0.2% 4.0% South Carolina 0.3% 5.5% 0.2% 4.2% South Dakota 0.1% 9.2% 0.1% 3.2% Tennessee 0.1% 6.5% 0.2% 3.4% Texas 0.4% 5.6% 0.1% 2.7% Utah 0.6% 10.8% 0.4% 4.4% Vermont 0.1% 4.1% 0.3% 4.5% Virginia 0.2% 2.6% 0.1% 4.3% Washington 0.7% 12.1% 0.4% 5.8% West Virginia 0.8% 2.3% 0.3% 4.3% Wisconsin 0.1% 5.8% 0.1% 4.7% Wyoming 1.2% 1.7% 0.0% 4.3% Entry-level homes have been in particularly short supply, leading to more rapid homeprice growth compared with more expensive homes. Dr. Frank Nothaft, chief economist for CoreLogic Source: CoreLogic January CoreLogic Proprietary. This material may not be reproduced in any form without express written permission. 7

10 Analysis The MarketPulse g March 2018 g Volume 7, Issue 3 Charts & Graphs HOME PRICE INDEX Percentage Change Year Over Year 20% 15% 10% 5% 0% -5% -10% -15% -20% Including Distressed Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Source: CoreLogic January 2018 OVERVIEW OF LOAN PERFORMANCE National Delinquency Rates Percentage Rate December 2016 December Days 30+ days or More to 59 Days days to 89 Days days to 119 Days days days Days (not in Past Due Past Due Past Due Past Due (not fcl) in fcl) 120+ Days days In Foreclosure Past Due Source: CoreLogic December 2017 The effect of the wildfires and hurricanes on delinquency transition rates was all too clear in our latest analysis. In Sonoma and Napa counties, both 30-to-60 day and 60- to-90 day delinquent transition rates in December were more than double what they had averaged the prior year. Frank Martell, president and CEO of CoreLogic CoreLogic Proprietary. This material may not be reproduced in any form without express written permission.

11 The MarketPulse g March 2018 g Volume 7, Issue 3 Analysis CORELOGIC HPI MARKET CONDITION OVERVIEW January 2018 Legend Normal Overvalued Undervalued Source: CoreLogic CoreLogic HPI Single Family Combined Tier, data through January CoreLogic HPI Forecasts Single Family Combined Tier, starting in February CORELOGIC HPI MARKET CONDITION OVERVIEW January 2023 Forecast Legend Normal Overvalued Undervalued Source: CoreLogic CoreLogic HPI Single Family Combined Tier, data through January CoreLogic HPI Forecasts Single Family Combined Tier, starting in February CoreLogic Proprietary. This material may not be reproduced in any form without express written permission. 9

12 Analysis The MarketPulse g March 2018 g Volume 7, Issue 3 NATIONAL HOME EQUITY DISTRIBUTION By LTV Segment 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% Q Q % to 54% 55% to 59% 60% to 64% 65% to 69% 70% to 74% 75% to 79% 80% to 84% 85% to 89% 90% to 94% 95% to 99% Loan-to-Value Ratio 100% to 104% 105% to 109% 110% to 114% 115% to 119% 120% to 124% 125% + Source: CoreLogic Q MAP OF AVERAGE YEAR-OVER-YEAR EQUITY GAIN PER BORROWER As of Q $40k $11k $17k $27k $44k $21k $27k $16k $21k $9k $12k $9k $6k $11k $6k $10k $23k $12k $11k $10k $13k $20k $4k Legend Q to Q Average Equity Gain More than $20,000 $10,000 $20,000 Up to $10,000 $3k $13k $5k $2k $9k $5k $0k $11k $4k $11k $12k $10k $0 or Below $18k Insufficient Data Vermont, West Virginia, Maine, Mississippi, South Dakota have insufficient equity data to report. Source: CoreLogic Q There are wide disparities in home-equity gains by geographic area, with higherpriced, capacity constrained markets along the East and West Coasts registering the largest increases. Frank Martell, president and CEO of CoreLogic CoreLogic Proprietary. This material may not be reproduced in any form without express written permission.

13 The MarketPulse g March 2018 g Volume 7, Issue 3 Analysis Variable Descriptions Variable Total Sales Total Sales 12-Month sum Total Sales YoY Change 12-Month sum New Home Sales New Home Sales Median Price Existing Home Sales REO Sales REO Sales Share REO Price Discount REO Pct Short Sales Short Sales Share Short Sale Price Discount Short Sale Pct Distressed Sales Share Distressed Sales Share (sales 12-Month sum) HPI MoM HPI YoY HPI MoM Excluding Distressed HPI YoY Excluding Distressed HPI Percent Change from Peak 90 Days + DQ Pct Definition The total number of all home-sale transactions during the month. The total number of all home-sale transactions for the last 12 months. Percentage increase or decrease in current 12 months of total sales over the prior 12 months of total sales The total number of newly constructed residentail housing units sold during the month. The median price for newly constructed residential housing units during the month. The number of previously constucted homes that were sold to an unaffiliated third party. DOES NOT INCLUDE REO AND SHORT SALES. Number of bank owned properties that were sold to an unaffiliated third party. The number of REO Sales in a given month divided by total sales. The average price of a REO divided by the average price of an existing-home sale. The count of loans in REO as a percentage of the overall count of loans for the reporting period. 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. The number of Short Sales in a given month divided by total sales. The average price of a Short Sale divided by the average price of an existing-home sale. The count of loans in Short Sale as a percentage of the overall count of loans for the month. The percentage of the total sales that were a distressed sale (REO or short sale). The sum of the REO Sales 12-month sum and the Short Sales 12-month sum divided by the total sales 12-month sum. Percent increase or decrease in HPI single family combined series over a month ago. Percent increase or decrease in HPI single family combined series over a year ago. Percent increase or decrease in HPI single family combined excluding distressed series over a month ago. Percent increase or decrease in HPI single family combined excluding distressed series over a year ago. Percent increase or decrease in HPI single family combined series from the respective peak value in the index. 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 Percent change year-over-year of the number of 90+ day delinquencies in the current month. YoY Chg Foreclosure Pct Percent Change Stock of Foreclosures from Peak Pre-foreclosure Filings Completed Foreclosures Negative Equity Share Negative Equity The percentage of the overall loan count that is currently in foreclosure as of the reporting period. Percent increase or decrease in the number of foreclosures from the respective peak number of foreclosures. The number of mortgages where the lender has initiated foreclosure proceedings and it has been made known through public notice (NOD). A 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. 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. 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 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) CoreLogic Proprietary. This material may not be reproduced in any form without express written permission. 11

14 End Notes The MarketPulse g March 2018 g Volume 7, Issue 3 MORE INSIGHTS The CoreLogic Insights Blog (corelogic.com/blog) provides an expanded perspective on housing economies and property markets, including policy, trends, regulation and compliance. Please visit the blog for timely analysis, thoughtprovoking data visualizations and unique commentary from our team in the Office of the Chief Economist. Source: CoreLogic The 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. For more information please call CoreLogic CoreLogic Econ CoreLogic Insights On The Go. Download our free App now: The MarketPulse is a newsletter published by CoreLogic, Inc. ("CoreLogic"). This information is made available for informational purposes only and is not intended to provide specific commercial, financial or investment advice. CoreLogic disclaims all express or implied representations, warranties and guaranties, including implied warranties of merchantability, fitness for a particular purpose, title, or non-infringement. Neither CoreLogic nor its licensors make any representations, warranties or guaranties as to the quality, reliability, suitability, truth, accuracy, timeliness or completeness of the information contained in this newsletter. CoreLogic shall not be held responsible for any errors, inaccuracies, omissions or losses resulting directly or indirectly from your reliance on the information contained in this newsletter. This newsletter contains links to third-party websites that are not controlled by CoreLogic. CoreLogic is not responsible for the content of third-party websites. The use of a third-party website and its content is governed by the terms and conditions set forth on the third-party s site and CoreLogic assumes no responsibility for your use of or activities on the site CoreLogic, Inc. All rights reserved. CORELOGIC, the CoreLogic logo, CORELOGIC HPI, SAFERENT and SCOREPLUS are trademarks of CoreLogic, Inc. and/or its subsidiaries. All other trademarks are the property of their respective holders. 17-MKTPLSE corelogic.com