Has there been an impact of the affordability crunch on the housing market?

Transcription

1 #vision2016 Has there been an impact of the affordability crunch on the housing market? Experian and the marks used herein are service marks or registered trademarks of Experian Information Solutions, Inc. Other product and company names mentioned herein are the trademarks of their respective owners. No part of this copyrighted work may be reproduced, modified, or distributed in any form or manner without the prior written permission of Experian.

2 Introducing: Richard Lombardi RealtyTrac #vision2016 Michele Raneri Experian

3 Objectives Market trends Credit trends Affordability analysis Spotting emerging trends Highlights include the specific geographic regional focus on: AZ, CA, CO, FL, and NY #vision2016 3

4 #vision2016 Market trends and analysis overview 4

5 Mortgage originations Q15: $472 BN +26% YoY 0 100% Percent Change YoY Source: Experian IntelliView SM 50% 0% -50% -100% 5

6 VantageScore Overview and usage VantageScore credit tiers A = Super-prime B = Prime C =Near Prime D = Sub-prime F = Deep Sub-prime Predicts risk of borrower Likelihood of future serious delinquencies 90 days later or greater) Any type of account 24-month performance window Score range of Higher scores represent lower risk #vision2016 6

7 Average VantageScore Mortgage inquiries and originations Spread between inquiries and originations Inquiries Originations 56-point spread Q Q Q Q Q Q Q Q Q3 7

8 Thousands Home prices up year-over-year $400 $350 $300 Sales price of existing homes December: $224,100 US West Northeast South Midwest U.S. U.S. +7.6% YoY (Dec) $250 $200 $150 $100 Source: National Association of Realtors 8

9 Interest rates and home sales 8% 7% Interest rate Recession Millions Mortgage rate % Home sales 8 7 5% 6 4% 5 3% 4 2% 1% December 2015: Mortgage: 3.96% Home sales: 5.46M % 0 Source: Realtor.org 9

10 Mortgage late stage delinquency rates 3.5% 3.0% 2.5% 2.0% Percent balances DPD DPD 4Q15 Data: 60-89: 0.58% : 0.74% 1.5% 1.0% 0.5% 0.0% #vision2016 Source: Experian IntelliView SM 10

11 2006Q1 2006Q2 2006Q3 2006Q4 2007Q1 2007Q2 2007Q3 2007Q4 2008Q1 2008Q2 2008Q3 2008Q4 2009Q1 2009Q2 2009Q3 2009Q4 2010Q1 2010Q2 2010Q3 2010Q4 2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 U.S. unemployment rate and foreclosure 250, ,000 Foreclosure Starts Unemployment Rate , , ,

12 Analysis overview Data sources RealtyTrac Experian Analysis Home purchase data Consumer-level credit data Mortgage trade-level detail Credit quality Delinquency Affordability Cash purchases #vision

13 Analysis design Geographic focal points NY CA CO AZ FL #vision

14 Analysis design Data sources and time points RealtyTrac provided single family and condo sales records Pre-recession Post recession Recovery May-July May-July May-July December December December Experian matched for each time point to credit file #vision

15 Average Origination VantageScore RealtyTrac mortgage consumers Distribution by year and state US AZ CA CO FL NY #vision

16 VantageScore and 90+ delinquency rates Distribution by year and state US % 3.5% 2.5% 1.5% 0.5% -0.5% 690 AZ % 3.5% 2.5% 1.5% 0.5% -0.5% 690 CA % 3.5% 2.5% 1.5% 0.5% -0.5% 690 CO % 3.5% 2.5% 1.5% 0.5% -0.5% 690 FL % 3.5% 2.5% 1.5% 0.5% -0.5% 690 NY % 3.5% 2.5% 1.5% 0.5% -0.5% #vision

17 VantageScore and 90+ delinquency rates Distribution by year and state US % 3.5% 2.5% 1.5% 0.5% -0.5% 690 AZ % 3.5% 2.5% 1.5% 0.5% -0.5% 690 CA % 3.5% 2.5% 1.5% 0.5% -0.5% 690 CO % 3.5% 2.5% 1.5% 0.5% -0.5% 690 FL % 3.5% 2.5% 1.5% 0.5% -0.5% 690 NY % 3.5% 2.5% 1.5% 0.5% -0.5% #vision

18 Average Origination VantageScore Key MSAs US CA-SanFrancisco Area FL-Miami Area CA San Francisco Area has highest regional average VantageScore in 2015 FL Miami / Ft. Lauderdale has lowest average VantageScore in 2015 #vision

19 Home sales analysis #vision2016 Richard Lombardi 19

20 Sale price and cash purchases Five geographic focus states Average Sale Price % Purchases Cash $600,000 70% $500,000 60% $400,000 50% $300,000 40% 30% $200,000 20% $100,000 10% $0 AZ CA CO FL NY 0% AZ CA CO FL NY 20

21 Affordability indices By state US AZ CA CO FL NY 21

22 Affordability indices Most and least affordable MSAs in 2015 for each state AZ CA US Sierra Vista Phoenix US Eureka-Fortuna San Fancisco FL NY CO US Pensacola Tampa-St. Petes. US New York Kingston US Grand Junction Denver 22

23 #vision2016 Emerging market spot trends 23

24 Foreign buyers Native language 2005 Cash share 2015 Cash share Percent increase Chinese speakers 14% 46% 229% All buyers 20% 33% 65% Native language 2005 Share of all buyers 2015 Share of all buyers Percent increase Mandarin 1.5% 1.7% 9% Hindi 1.4% 1.5% 3% English 83.8% 86.4% 3% Arabic <1% <1% 1% #vision2016 Sources: RealtyTrac, Ethnic Technologies 24

25 Eroding affordability Foreign buyer meccas Santa Cruz, CA Marin, CA New York, NY Kings, NY San Francisco, CA Q2 2012Q2 2007Q2 25

26 Foreign buyers lender impact Miami-Dade share of home purchases all cash 69% 57% 17% #vision

27 Environmental crisis Porter Ranch, CA 27

28 Environmental crisis Seller impact Change in home sales Before and after Porter Ranch gas leak* (5YR Avg) (Porter Ranch) Northridge Ventura County LA County CA National -16% -17% -18% -32% -25% -25% -44% *Comparing sales in August 2015 to October 2015 period to sales in the November 2015 to January 2016 period. The Leak was discovered October 23,

29 Environmental crisis Lender impact Change in cash buyer share Before and after Porter Ranch gas leak* 50% 23% 27% 14% 10% 14% 11% (5YR Avg) (Porter Ranch) Northridge Ventura County LA County CA National *Comparing sales in August 2015 to October 2015 period to sales in the November 2015 to January 2016 period. The Leak was discovered October 23,

30 Institutional investors Home sale share 25% 23% 20% 15% 18% 10% 5% 0% 9% 7% 8% 8% 5% 6% 3% U.S. Memphis Atlanta 30

31 Borrower impacts Median home prices reaching new peaks $250,000 $200,000 $187,500 $150,000 $100,000 $140,000 $50,000 U.S. Atlanta-Sandy Springs-Roswell, GA Memphis, TN-MS-AR $- 31

32 Lender impacts Cash sale share of institutional investor purchases 86% 95% 86% 90% 93% 87% 87% 65% 67% U.S. Memphis Atlanta #vision

33 Best practices Understand the market Know your trends Know the industry Look at micro drivers and events Affordability Look out for emerging trends BE INFORMED 33

34 For additional information, please contact: #vision2016 Twitter Handle: MLRaneri Follow us on #vision

35 Share your thoughts about Vision 2016! Please take the time now to give us your feedback about this session. You can complete the survey in the mobile app or request a paper survey. Select the Survey 1 button and complete 2 Select the breakout session you attended #vision

36 #vision