The Marketpulse June 2019 the Marketpulse

The MarketPulse June 2019 The MarketPulse

Volume 8, Issue 6 June 2019 Data as of Table of Contents April 2019 (unless otherwise stated) Multifamily Sales and Prices at New Highs...... 3

Special Report: Investor Home Buying...... 4

Housing Statistics Single-Family Rent Growth Picks Up a Bit...... 7 June 2019 Homebuyers Face Much Slower Growth in the “Typical HPI® YOY Chg 3 .6% HPI YOY Chg XD 3 .2% Mortgage Payment” This Year ...... 9 NegEq Share 5 .6% (Q1 2019) In the News...... 11

Charts & Graphs...... 12 10 Largest CBSA – Loan Performance Insights Report March 2019. .12 Overview of Loan Performance...... 12 Home Price Index State-Level Detail — Combined Single Family Including Distressed ...... 13 Home Price Index...... 14 CoreLogic HPI® Market Condition Overview...... 15

April 2019...... 15 April 2024...... 15 National Home Equity Distribution...... 16 Map of Average Year-Over-Year Equity Gain per Borrower...... 16

As of Q1 2019...... 16

News Media Contact

Chad Yoshinaka [email protected] 817-699-4572 (office)

2 Multifamily Sales and Prices at New Highs Corelogic Economic Outlook: June 2019

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

Multifamily property sales totaled about $100 billion in Figure 2. Multifamily Prices Highest Along Paciﬁ c Coast 2018, the largest annual volume recorded, and apartment Median Price per Square Foot Metropolitan Area prices reached new highs last year. Rent is expected to in 2018 (Dollars) rise about 3% in 2019 with cap rates close to last year’s San Francisco, CA 474 level, supporting further gains in property values.1 Anaheim, CA 339

Multifamily sales and prices nosedived during the Great San Diego, CA 303 Recession but recovered sooner and faster than single- Los Angeles, CA 296 family. According to the CoreLogic Home Price Index for the U.S., home values hit bottom in March 2011, but we Oakland, CA 291 found that the recovery in multifamily prices began a year Seattle, WA 271 earlier. (Figure 1) A review of CoreLogic’s public records New York, NY-NJ 238 data found that the median purchase price exceeded $100 per square foot in 2018, up 5% from 2017 and more Denver, CO 201 than 50% from the 2010 trough. Portland, OR-WA 163

Sacramento, CA 159 Figure 1. Multifamily Prices Hit New High in 2018 Washington, DC-VA-MD-WV 141 Median Price Per Square Foot (Dollars) Dallas, TX 140 110 Austin, TX 136 100 90 Phoenix, AZ 133

80 Minneapolis, MN-WI 117 70 Charlotte, NC-SC 102 60 50 Tampa, FL 99

40 Chicago, IL 92 30 Orlando, FL 90 Source: CoreLogic, multifamily property sales Atlanta, GA 74

Property sales volume and prices vary widely by Source: CoreLogic, multifamily property sales during 2018 in the 20 metropolitan area. The New York and Los Angeles metros with largest sales volume metropolitan statistical areas top all others in apartment building sales, together accounting for about 20% of the metros along the Paciﬁ c coast and in the New York City national dollar volume. Diﬀ erences in land values and region. Among the 20 largest multifamily sales markets, rent equate to wide variation in sales prices. (Figure 2) we found that San Francisco had the highest median The sales price per square foot tends to be highest in Continued on page 8

1 Urban Land Institute Real Estate Economic Forecast, April 2019. 3 Special Report: Investor Home Buying Don’t Call It a Comeback: Housing Investors Have Been Here for Years

Ralph McLaughlin Deputy 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 and using data and analytics to expand the visibility of the CoreLogic economic policy unit. He also works to enhance research capabilities and tools for clients, industry leaders, the public sector and news media. Ralph has more than 15 years of experience in housing economics, applied econometrics, real estate development and investment, land use planning, spatial analysis, and economic geography. He previously worked at Trulia and Veritas Urbis Economics. He also served as an assistant professor at the San Jose State University. While at Trulia, he led the company’s housing economics research team, providing buyers with key insights about the economy, housing trends and public policy.

Home purchasing activity1 among investors is on the rise. Investor Activity in the U .S . Housing Market In 2018, the share of home sales bought by investors Reaches Record Highs reached its highest level in two decades. However, this By the end of 2018, the investment rate in the U.S. housing increase isn’t from big institutional buyers, but rather market reached 11.3%—the highest rate since CoreLogic from smaller investors just getting into the game. What’s started tracking these data in 1999. The investment more, these investors appear to be focusing in the purchase rate in 2017 was the second highest on record at starter-home tier, giving first-time homebuyers a run for 11%, which was above the investor buying fury of 2012– their money while also chasing homes in markets with 2014 when purchase rates reached 10.3%–10.9%. relatively high rents. 2 mclaughlin fig 1 2 mclaughlinSmaller investors fig are 2responsible for increasing investor In this CoreLogic special report, we take a deep dive into homebuying activity. This is in sharp contrast to the rise in . Subhead copyinvestor goes homebuying here activity. Not only do. we Subheadinvestigate copy goes here large institutional investors in the years following the investor homebuying nationally, we also identify investor recession. When looking at investor activity based on the activity by home price tier. Additionally, we examine why total number of properties purchased over our study investors are more active in some markets than others, and if increasing investor activity tightens market conditions. Continued on page 5

Figure 1. U.S. Investor Homebuying Rates: 1999–2018 Figure 2. U.S. Investor Homebuying Rates by Investor Size: 1999–2018 Investors Purchases are at 20 Year Highs Mom-and-Pop Investor Activity on the Rise

12% 80%

11% 70%

60% 10% 50% 9% 40% 8% 30% 7% 20% 6% % of Investor-Purchased Homes of Investor-Purchased % 10%

5% 0%

4% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 1-10 Properties 11-100 Properties 101 + Properties Source: CoreLogic Public Records and Author’s Calculations Source: CoreLogic Public Records and Author’s Calculations

1 We define investors as buyers of homes that use a corporate or non-individual identifier on the deed. This includes LLCs, CORPs, and INCs, to name a few. We have removed identifiers that are likely to be government agencies or banks, as these are likely to be non-arm’s length transactions, 4 including REO acquisitions, repossessions, and/or foreclosures rather than open-market transactions .

Special Report continued from page 4

Figure 3. U.S. Investor Homebuying Rates: 1999–2018 of the top 10 metros with the highest investor purchase Investors Focusing on Starter Homes rates is in the eastern half of the country, with Detroit, 25% Philadelphia and Memphis, Tennessee leading the pack at 27%, 23.3%, and 19.7%, respectively. Just two of the top 10 20% are western markets, with Des Moines, Iowa and Oklahoma City, Oklahoma at 18.7% and 17.2%, respectively. 15% Investor activity tends to be lowest in the West, although two East Coast markets and one Midwest 10% market also had lower levels of activity. The five markets with the least amount of investor activity are 5% all west of the Rockies, including Ventura, California,

0% Boise, Idaho, Oakland, California, San Jose, California and Sacramento, California at 4.8%, 4.8%, 5.1%, 5.2% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 and 5.3%, respectively. The three non-western markets Starter Homes Move-Up Homes High End Homes with lower activity include Elgin, Illinois, Frederick, Source: CoreLogic Public Records and Author’s Calculations Maryland and Worcester, Massachusetts at 5.4%, 5.6% and 5.9%, respectively. period, we found small investors—those who purchased Continued on page 6 10 homes or less between 1999 and 2018—have increased their share of homebuying more than large- and medium-sized investors. These so-called “mom-and-pop” Figure 4. Housing Markets with Most Investor Activity, 2018 Tend to be Highest in Eastern Half of U.S. investors grew from 48% of all investor-purchased homes in 2013 to more than 60% in 2018. Large investors—those Investor Investor Metro Purchase Metro Purchase who purchased more than 101 homes—nearly doubled Share Share their activity between 2000 and 2013 but have pulled Detroit, MI 27.0% Atlanta, GA 18.5% back since the foreclosure crisis and now sit at 15.8% of Philadelphia, PA 23.3% Des Moines, IA 17.2% ©2019 CoreLogic, Inc. All Rights Reserved. purchases. Medium-sized investors—those who 3 purchased between 11 and 100 homes—have also seen Memphis, TN 19.7% Baltimore, MD 17.2% their share steadily fall, from a peak of 30% in 2010 to Long Island, NY 18.8% Camden, NJ 16.7% 22.7% in 2018. Oklahoma City, OK 18.7% Cleveland, OH 16.7% We also found investor purchase rates were much Source: CoreLogic higher among starter-homes. The share of starter homes purchased by investors peaked at over one-in- Figure 5. Housing Markets with Least Investor Activity, 2018 five homes over the past two years, with a rate of Tend to be Lowest in Western Half of U.S.

20.3% in both 2017 and 2018. These rates are 2–3 Investor Investor times the investor purchasing rates of move-up (middle Metro Purchase Metro Purchase tier) and high-end (upper tier) homes that also peaked Share Share in 2018 at 7.8% and 6.3%, respectively. Ventura, CA 4.8% Elgin, IL 5.4%

Boise, ID 4.8% Frederick, MD 5.6% Investor Activity Highest in Eastern Half of the U .S ., Lowest in West Oakland, CA 5.1% Stockton, CA 5.7% San Jose, CA 5.2% We also found investor homebuying rates vary sharply Worcester, MA 5.9% across the country, with the highest rates east of the Sacramento, CA 5.3% El Paso, TX 5.9% Mississippi River and the lowest rates to its west. Each Source: CoreLogic

5 Special Report continued from page 5

No Surprise: Investors Attracted to High- Investors are likely attracted to markets with high-cap Rent Markets rates because cap rates are simply a measure of expected returns. For example, on an initial investment Why are investors buying homes at high rates in some of $100,000, a property with a 10% cap rate will be markets and lower rates in others? While there are expected to deliver an annual return of $10,000 in rent, several plausible explanations, we found investors are and a property with a 2% cap rate would be expected to attracted to markets where rents are relatively high deliver $2,000. While there are certainly other compared 2to purchase mclaughlin prices. The inter-market fig variation 6 considerations for investors, cap rates are simple but in median cap rates—which is the ratio of annual rent . Subhead copy goes here powerful indicators of market dynamics because they collected on a property compared to its value—is highly also capture other market-level opportunities and risks, correlated with the share of investor activity in a given such as expectations of future home value growth, market. Across our sample of the 100 largest markets vacancy rates, tenant risk and physical conditions of between 2012 and 2018, the correlation is quite strong, with a Pearson’s R of 0.55 for you stats nerds out there. Continued on page 11

Figure 6. Metro Cap Rates Correlated with Investor Homebuying Annual Median Cap Rate vs. Annual Investor Homebuying Rates, 2012–2018

40%

35%

30%

25% 20% 2 mclaughlin fig 7 15%

10% . Subhead copy goes here

5% % % Investors by Purchases Home of

0% 0% 2% 4% 6% 8% 12% 10% Median Annual Cap Rate Source: CoreLogic Public Records, CoreLogic REAS, and Author’s Calculations

Figure 7. Increase in Investor Activity Correlated with Tightening Markets Markets with Growing Share of Investors Saw Relative Supply Fall

20% 15% 10% 5% 0% -5% -10% -15% -20% ©2019 CoreLogic, Inc. All Rights Reserved. 4 -25% % Point Change in Market Velocity in Market Change Point % -30% 0% 2% 4% 6% 8% -8% -6% -4% -2% 10% 12% -10% % Point Change in Investor Activity, 2012–2018 Source: CoreLogic Public Records, CoreLogic REAS, and Author’s Calculations

Molly Boesel Principal, 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.

Rents for lower-priced homes increased faster than those of higher-priced homes. For the fifth consecutive month, Phoenix had the largest annual rent increase of the 20 analyzed metropolitan areas in April. Houston and Orlando had the largest deceleration in rent growth in April. U.S. single-family rents increased 3% year over year in April increased 3.6% year over year and rents for higher-priced 2019, up from a 2.8% increase in April 2018, according to homes, defined as properties with rents more than 125% the CoreLogic Single-Family Rent Index (SFRI). The index of the regional median rent, increased 2.5% year over year. measures rent changes among single-family rental homes, 1 including condominiums, using a repeat-rent analysis to Rent growth varies significantly across metro areas . measure the same rental properties over time. Single- Figure 2 shows the year-over-year change in the rental family rents climbed steadily starting in 2010, and annual index for 20 large metropolitan areas in April 2019. rent increasesboesel have stabilized, Fig fluctuating 1 between 2.9% Phoenix had the highest year-over-year rent growth and 3.2% for the past 12 months. this April with an increase of 6.9%, followed by Tucson . Subhead copy goes here (6.5%) and Las Vegas (6.5%). Orlando had the strongest Using the rent index to analyze specific price tiers reveals year-over-year employment growth among the 20 important differences. Figure 1 shows that the index’s metros in April, with job gains of 3.5%, and Phoenix overall growth in April 2019 was propped up by low-end had employment growth of 3.2%. This is compared rentals, defined as properties with rents 75% or less of a with national employment growth of 1.8%. Miami had region’s median rent. Rents on lower-priced rental homes Continued on page 8

Figure 1. National Single-Family Rent Index Year-Over-Year Percent Change By Price Tier

-2%

-4%

-6% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 SFRI Low Tier High Tier Source: CoreLogic Single-Family Rent Index, April 2019

1 Metro areas used in this report are Core Based Statistical Areas . The SFRI is computed for 75 CBSAs . 7

the lowest rent growth in April, increasing by just 0.9% points, from 4% in April 2018 to 1.2% in April 2019. The from the prior year. Houston and Orlando had the pace of growth fell by 1.1 percentage points in Orlando, largest deceleration in rent growth in April. The pace of from 5.1% in April 2018 to 4% in April 2019.  annual rent growth in Houston fell 2.8 percentage

Figure 2. Single-Family Rent Index Year-Over-Year Percent Change in 20 Markets

8% 7% Apr 2018 6% Apr 2019 5% 4% 3% 2% 1% 0% Miami, FL Dallas, TX Austin, TX Austin, Detroit, MI Chicago, IL Chicago, Tucson, AZ Tucson, Atlanta, GA Atlanta, Seattle, WA Boston, MA Boston, Orlando, FL Orlando, Phoenix, AZ Houston, TX Honolulu, HI St. MO Louis, Charlotte, NC Las Vegas, NV San Diego, CA San Diego, Los Angeles, CA Angeles, Los Washington, DC Philadelphia, PA Source: CoreLogic Single-Family Rent Index, April 2019

Multifamily Sales continued from page 3 Multifamilysales price Sales per square footby for apartmentProperty buildings Sizedifference in 2018 in project size and location of larger projects in . Subhead copyduring goes2018, about here quadruple the national median price. higher-cost areas also led to large differences in the sales price per property. Nationally, nearly one-quarter of The size of apartment buildings traded also varies greatly. apartment building sales volume was for properties sold (Figure 3) During 2018, nearly one-quarter of the for $5 million or less, and another one-quarter was for properties sold had less than 20 apartments, and about properties that were sold for $50 million or more. one-quarter had more than 300 apartments. The With rent growth expected to outpace inflation in 2019 and cap rates remaining low, multifamily property values Figure©2019 3. MultifamilyCoreLogic, Inc. All RightsSales Reserved. by Property Size in 2018 2 Multifamily Dollar Sales by Number of Apartments in Property should rise further in 2019, albeit at a slower growth than last year.

5–20 Apartments Summary: 23% 23% Apartment building sales hit a new high of $100 billion 21–50 Apartments in 2018.

51–100 Apartments Multifamily median sales price exceeded $100 per square foot in 2018. 12% 101–300 Apartments Multifamily values in San Francisco were four times higher than the U.S. median. 31% More Than 300 11% Apartments Apartment building sales varied widely in size during 2018. Rents expected to rise 3% in 2019, supporting further Source: CoreLogic, multifamily property sales during 2018 price gains. 

©2019 CoreLogic, Inc. All Rights Reserved. 2 Homebuyers Face Much Slower Growth in the “Typical Mortgage Payment” This Year Reversing a Trend That Had Hampered Homebuyers, Lower Interest Rates Have Pushed Annual Growth in Buyers’ Mortgage Payments Below That of Prices

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.

Last year’s rising mortgage rates meant the monthly By March this year, however, declining mortgage rates payments that many homebuyers struggled to qualify had resulted in the annual growth rate for the typical for were rising much faster than home prices. In mortgage payment dropping below that of home prices. Novemberlepage 2018, for example, Fig the U.S. 1 median sale price Moreover, some rate and price forecasts suggest the rose about. 4%Subhead year over year, copy but the goes principal-and- here mortgage payments homebuyers face the rest of this interest payment on that median-priced home—what year will, on a year-over-year basis, be only slightly we call the “typical mortgage payment”1—surged 17% higher or a tad lower, which could help spur home sales. because mortgage rates had risen a percentage point. Continued on page 10

Figure 1. Lower Gains Ahead for Homebuyers’ Mortgage Payments, Rate and Price Forecasts Suggest Mortgage Rates vs. Year-Over-Year Change in Real Median Sale Price & Typical Mortgage Payment

30% Mar-20: 3.6% 8

Mar-18: 8.1% 7 20% Forecast 6

10% 5

0% 4

3 -10% Mar-19: 0.0% 2

-20% 1 MonthlyAvg Rate for 30-YrFixed-Rate Mtg

-30% 0 Jan-01 Jul-02 Jan-04 Jul-05 Jan-07 Jul-08 Jan-10 Jul-11 Jan-13 Jul-14 Jan-16 Jul-17 Jan-19 YoY % Change in Real Median Price and Real Typical Mtg Pmt Mtg Typical and Real Price Median in Real Change % YoY Avg 30-year Mtg Rate YoY Change in Real Median$ YoY Change in Real Typical Mtg Pmt Source: CoreLogic, IHS Markit, Freddie Mac, Fannie Mae; and IHS, National Association of Home Builders, Mortgage Bankers Association and National Association of Realtors for averaging mortgage rate forecasts . Chart forecast period begins Apr-19 .

1 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% down payment. It does not include taxes or insurance, which vary geographically. The typical mortgage payment is a good gauge of affordability over time because, when adjusted for inflation, it shows the monthly principal and interest amount homebuyers have committed to historically in order to buy the median priced U .S . home 9

The U.S. median sales price of $222,482 in March 2019 over the year ending March 2020 (or 5.0% in nominal, or was up 3.5% year over year, down from an 8% annual gain not-inflation-adjusted, terms). Based on that projection, in March 2018. The typical mortgage payment was only up coupled with the aforementioned consensus mortgage 1.9% this March because of a roughly 0.1-percentage-point rate forecast, the real typical monthly mortgage payment decline in mortgage rates over the prior year. In March 2018 would rise from $878 in March 2019 to $910 by March the typical mortgage payment’s annual gain was 11%, thanks 2020, a 3.6% year-over-year gain. In nominal terms the to a 0.2-percentage-point annual gain in mortgage rates. typical mortgage payment’s year-over-year increase in March 2020 would be 6.9%. Looking ahead, the CoreLogic Home Price Index (HPI) and HPI Forecast suggest annual gains in home prices each When adjusted for inflation3 the typical mortgage month from this April through next March will average payment puts homebuyers’ current costs in the proper 4.3%. That forecast, combined with the average among historical context. Figure 2 shows that while the real six mortgage rate forecasts2, suggests that over that typical mortgage payment has trended higher in recent same period the annual change in the typical mortgage years, in March 2019 it remained 31.5% below the payment each month will average out to a gain of 0.9%, all-time peak of $1,281 in June 2006. That’s because the including fivelepage months in which Fig there 2is a slight annual average mortgage rate back in June 2006 was about decline (Figure 1). 6.7%, compared with an average rate of about 4.3% in . Subhead copy goes here March 2019, and the real U.S. median sale price in June The CoreLogic HPI Forecast suggests the median sale 2006 was $248,066 (or $197,000 in 2006 dollars), price will rise 1.8% in real, or inflation-adjusted, terms compared with a March 2019 median of $222,482. 

Figure 2. Lower Rates Have Kept “Typical Mortgage Payment” Below ‘06 Peak Inflation-Adjusted Monthly “Typical Mortgage Payment” That Buyers Commit To

$1,400 Jun-06: $1,281

$1,300 Mar-19: $878 $1,200

Forecast $1,100 Mar-18: $877 Jun-18: $955 $1,000

$900

$800

$700 Mar-20: $910 $600

$500

$400 Jan-00 Jan-02 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 Jan-14 Jan-16 Jan-18 Jan-20 Source: CoreLogic, IHS Markit, Freddie Mac, Fannie Mae; and IHS, National Association of Home Builders, Mortgage Bankers Association and National Association of Realtors for averaging mortgage rate forecasts . Chart forecast period begins Apr-19 .

2 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 . ©2019 CoreLogic, Inc. All Rights Reserved. 10 3 Inflation adjustments made with the U.S. Bureau of Labor Statistics Consumer Price Index (CPI), Urban Consumer – All Items. 2 Special Report continued from page 6 properties. All things being equal, investors tend to prefer higher over lower returns, and those in the housing market—especially smaller investors—are no different.

Increase in Investor Activity Associated with Tighter Housing Market Conditions In the News Additionally, we found larger increases in investor activity from the housing market bottom (2012) to the most recent calendar year (2018) are also Wall Street Journal – June 20 strongly correlated with tightening housing market conditions. Across the Investors Are Buying More of the largest 100 markets, there is a moderate correlation (Pearson’s R of 0.35) U .S . Housing Market Than Ever between the change in investor activity over these six years and the change Before in market velocity (the rate of sales divided the number of new listings) over “The share of investor purchases of U .S . homes have climbed to an the same period. In other words, markets that witnessed an increase in the all-time high, a sign that rising home share of active investors also experienced a similar increase in how fast pries have done little to dampen demand for flipping homes or turning homes were selling. them into single-family rentals ”.

Does this mean investors snapped up supply that would have otherwise CNBC – June 20 been bought by owner-occupiers? Maybe, but the evidence isn’t conclusive Falling mortgage rates are heating because there’s a possible chicken-or-egg relationship between the two. home prices this summer “The pickup in sales between March While an uptick in investors into a market perhaps increases competition and April, has helped to counter the and lowers supply relative to demand, the opposite is also possible: recent slowing in annual home-price markets with tightening supply could draw investors as they perceive growth,” said Frank Nothaft, chief economist at CoreLogic . markets with a dwindling supply to be safer bets than those with more plentiful supply. National Mortgage News – June 11 March foreclosure rates haven’t The Gist been this low in 20 years “Foreclosure rates in March hit While we found investor activity is at an all-time high and concentrated in their lowest reading for the month the lower end of the market, we can’t definitively conclude this increase in at least 20 years, while overall and serious delinquency rates also leads to excessive competition for owner-occupiers. This is because it’s also achieved 13-year lows for the same possible investors are filling a void in markets where there is less owner- period, according to CoreLogic .” occupier demand. Maybe not so coincidentally, the places with the most Herald-Tribune – June 6 investor activity—like Detroit, Philadelphia and Baltimore—had less Fewer Sarasota-Manatee demand and slower price growth in the latest economic expansion homeowners upside down on compared to regions with less investor activity and higher price growth, mortgages “A total of 9,070 residential properties such as San Jose, Oakland and Ventura. Either way, it’s a truism that – or 5.0% of those mortgage – in homebuyers today are more likely to cross paths with investors during an the Sarasota-Manatee region open house than at any other time in the past two decades. owed more on their loans than the homes were worth in the first quarter of 2019, data provider Readers interested in the full data release can download it here.  CoreLogic reported Thursday ”.

Dallas News – June 4 Dallas-area home prices grew by less than 3 percent in April “Home prices in Dallas rose by just 2 .68% in April compared with a year ago. That’s less than the nationwide gain of 3 .6% .”

11 Charts & Graphs

10 Largest CBSA – Loan Performance Insights Report March 2019

30 Days or 30 Days or More Serious More Serious Delinquency Delinquency Foreclosure Delinquency Delinquency Foreclosure Rate March Rate March Rate March Rate March Rate March Rate March CBSA 2019 (%) 2019 (%) 2019 (%) 2018 (%) 2018 (%) 2018 (%)

Boston-Cambridge-Newton MA-NH 3.3 1.0 0.3 3.2 1.2 0.5

Chicago-Naperville-Elgin IL-IN-WI 4.4 1.7 0.6 4.4 2.0 0.8

Denver-Aurora-Lakewood CO 1.8 0.4 0.1 1.6 0.5 0.1

Houston-The Woodlands-Sugar Land TX 4.9 1.6 0.3 7.6 4.4 0.4 2.78x5.93;Las Vegas-Henderson-Paradise NV no legend, 3.6 no 1.5 horizontal 0.6 3.9 axis 2.1labels; 0.8 7pt Los Angeles-Long Beach-Anaheim CA 2.6 0.7 0.2 2.5 0.8 0.2 loanMiami-Fort Lauderdale-Westperformance Palm Beach FL 5.4mar 2019: 2.1 0.9national 9.1 overview 5.9 1.1 New York-Newark-Jersey City NY-NJ-PA 5.5 2.7 1.2 5.8 3.4 1.7

San Francisco-Oakland-Hayward CA 1.4 0.4 0.1 1.5 0.5 0.1

Washington-Arlington-Alexandria DC-VA-MD-WV 3.7 1.3 0.3 3.5 1.5 0.4

Source: CoreLogic March 2019

Overview of Loan Performance National Delinquency News

5.0

4.3 4.0 4.0

3.0

2.0 2.0 1.8

PercentageRate 1.5 1.3 1.1 1.0 1.0 0.6 0.6 0.6 0.4 0.4 0.3

0.0 March 2018 30 Days or More 30-59 Days 60-89 Days 90-119 Days 90+ Days 120+ Days In Past Due Past Due Past Due Past Due (not in fcl) Past Due Foreclosure March 2019 Source: CoreLogic March 2019

“Delinquency rates and foreclosures continue to drop through March and should decline further in the months ahead barring any serious dislocations from recent flooding in the mid-west or a severe Atlantic hurricane and/or wildfire season on the coasts.”

Frank Martell

12 Home Price Index State-Level Detail — Combined Single Family Including Distressed April 2019 Month- Forecasted Month- Forecasted Over-Month Over-Month Year-Over-Year State Percent Change Year-Over-Year Percent Change Percent Change

Alabama 0.7% 3.9% 0.8% 5.4%

Alaska 1.1% 1.8% 0.8% 6.8%

Arizona 0.8% 6.1% 0.8% 5.4%

Arkansas −0.2% 2.6% 0.6% 4.5%

California 0.7% 1.9% 1.2% 10.7%

Colorado 0.7% 4.6% 0.8% 4.7%

Connecticut −0.2% −0.3% 0.7% 6.9%

Delaware 0.7% 1.7% 0.8% 4.6%

District of Columbia 0.1% 1.8% 0.7% 4.5%

Florida 0.2% 4.0% 0.7% 5.7%

Georgia 0.0% 4.5% 0.7% 4.6%

Hawaii 0.9% 2.6% 1.1% 7.4%

Idaho 2.2% 10.3% 1.2% 5.6%

Illinois 1.1% 2.1% 1.0% 6.6%

Indiana 1.4% 6.4% 1.0% 5.7%

Iowa 0.1% 2.2% 0.8% 6.0%

Kansas 1.9% 5.1% 0.9% 4.9%

Kentucky 1.0% 3.9% 0.9% 5.1%

Louisiana 0.3% 0.5% 0.6% 2.7%

Maine 0.3% 4.7% 0.8% 5.9%

Maryland 0.8% 1.9% 0.7% 4.7%

Massachusetts 0.7% 2.9% 0.9% 6.8%

Michigan 0.8% 4.8% 1.1% 7.9%

Minnesota 1.2% 4.0% 0.9% 4.7%

Mississippi 0.4% 4.3% 0.7% 4.3%

Missouri 1.2% 3.9% 0.9% 5.7%

Montana 0.8% 2.4% 0.7% 6.0%

Nebraska 0.9% 4.5% 0.8% 5.1%

Nevada 0.7% 7.2% 1.0% 9.5%

New Hampshire 1.1% 5.1% 1.1% 7.7%

New Jersey 0.5% 2.3% 0.6% 5.8%

New Mexico 1.0% 3.2% 1.0% 5.7%

New York 0.0% 4.6% 0.6% 5.5%

North Carolina 0.6% 4.1% 0.8% 4.8%

North Dakota −0.3% −5.0% 0.7% 3.1%

Ohio 1.3% 5.6% 0.9% 5.3%

Oklahoma 0.2% 2.4% 0.6% 3.8%

Oregon 1.0% 3.9% 1.1% 7.4%

Pennsylvania 0.9% 3.8% 1.0% 6.1%

Rhode Island 1.0% 3.8% 1.1% 6.0%

South Carolina 0.8% 4.8% 0.9% 5.6%

South Dakota 1.3% 7.8% 0.9% 4.8%

Tennessee 0.9% 5.1% 0.7% 4.3%

Texas 0.4% 3.1% 0.6% 2.1%

Utah 1.2% 7.8% 0.9% 5.1%

Vermont −0.8% 2.1% 0.7% 4.0%

Virginia 0.6% 2.9% 0.8% 5.2%

Washington 1.2% 2.7% 0.9% 6.1%

West Virginia 0.0% 1.4% 0.7% 5.2%

Wisconsin 1.2% 5.3% 1.0% 5.7%

Wyoming 0.6% 2.8% 1.3% 7.3%

Source: CoreLogic April 2019

13 3.04x5.67; 7pt type hpi as of apr 2019

Charts & Graphs (continued)

Home Price Index Percentage Change Year Over Year

20%

15%

10%

-5%

-10%

-15%

-20% Including 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Distressed Source: CoreLogic April 2019

“Mortgage rates are 0.6 percentage points below what they were one year ago and incomes are up, which has improved affordability for buyers.

Dr . Frank Nothaft Chief Economist for CoreLogic

14 CoreLogic HPI® Market Condition Overview April 2019

Legend

■ Normal ■ Overvalued ■ Undervalued Source: CoreLogic CoreLogic HPI Single Family Combined Tier, data through April 2019 . CoreLogic HPI Forecasts Single Family Combined Tier, starting May 2019 .

CoreLogic HPI® Market Condition Overview April 2024

Legend

15 2.54x5.78 q1 equity as of q1 2019

Charts & Graphs (continued)

National Home Equity Distribution By LTV Segment

10% 9% 8% 7% 6% 5% 4% 3% 2% Q4 2018 1% Q1 2019 0%

Loan-to-Value Ratio Including Distressed Source: CoreLogic Q1 2019

Map of Average Year-Over-Year Equity Gain per Borrower As of Q1 2019

4 K

7 K −16 K

7 K 7 K 21 K 12 K 8 K 7 K 17 K 20 K

5 K 7 K 8 K

$300 7 K 6 K 10 K

16 K

Vermont has insufficient equity data to report. Source: CoreLogic Q1 2019

“The country continues to experience record economic expansion as illustrated by these increases in home equity. We expect home equity to continue increasing nationally in 2019, albeit at a slower pace than in recent years.”

Frank Martell President and CEO of CoreLogic

16 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 0.3% 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 0.9% 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 0.4% (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 0.2% 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 Percent increase or decrease in the number of foreclosures from the respective peak number of from Peak 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 Foreclosures 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. 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 0.4% (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 The rate serious delinquency mortgages which are within the legislated purchase limits of Fannie Mae Delinquency Rate and Freddie Mac. The conforming limits are legislated by the Federal Housing Finance Agency (FHFA). Jumbo Prime Serious The rate serious delinquency mortgages which are larger than the legislated purchase limits of Fannie Delinquency Rate Mae and Freddie Mac. The conforming limits are legislated by the Federal Housing Finance Agency (FHFA).

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