U.S. Economic and Housing Outlook September, 2017 Genworth Mortgage Insurance Corporation ©2017 Genworth Financial, Inc. All rights reserved.

National Environment and Market Economy at Full Employment with Unemployment Rate under 4.5% … Moderate Job & Income Growth … Long Live the Economic Expansion Mortgage Rates Jumped after the November Election … Moderate Inflation and Growth Support Flat or Gradually-Higher Rates Baby Boomers and Millennials to Shape the Economy … Housing, Education & Health, Tourism, Business Services Are Growth Industries Economy Increased Household Formation & 1st Time Homebuyers Drive Housing Demand … Homeownership Still Affordable, Hinges on Low Mortgage Rates … Attractive Relative to Renting Home Sales Growth Slowing … Housing Starts Shifting to SF & Owner-Occupied, Expecting Moderate Growth in Volume … Builders Turning to Entry-Level Demand … Housing to Remain a Seller’s Market … Slowdown in HPA Unlikely Housing Market Lower Refinance Volume a Challenge for Lenders … Purchase Origination Expected to Drive Market … 1st Time Homebuyers Expected to Expand Low Down Payment Mortgages & Higher Mortgage Debt Mortgage Credit Box Stable … Credit Quality Remain Pristine … Mortgage Performance Normalized … Agency Market Remains Dominant at ~80% Market Mortgage Market Housing and Mortgage Market 2 2

A Slow and Steady Recovery 2.1 2.8 3.6 4.3 4.4 4.0 5.1 4.9 5.6 7.6 3 3.5 3.25 2 8.75 3 5 1 7.75 10 5 8 Housing and Mortgage Market

Where Are We? Housing and Mortgage Market

Growth Industries 1.9 (16) 4.0 (16) 3.2 (16) 3.0 (16) 0.3 (16) 1.8 (16) 0.9 (16) 2.2 (16) 1.5 (16) 3.1 (16) 0.1 (16) 1.5 (16) -16.1 (16) 1.2 (16) Source: Bureau of Labor Statistics Housing and Mortgage Market

What Will Happen to Interest Rates? Monetary Easing Began QE Taper Tantrum Housing and Mortgage Market

Three Surprises Housing and Mortgage Market U.S. Election Chinese economic slowdown 1st Fed Rate Hike Brexit Housing and Mortgage Market

A Demographic Transformation Total Population Growth ~4% between 2015 and 2020 Boomers Millennials Housing and Mortgage Market

Signs of Influence Housing and Mortgage Market

U.S. Housing Market Demographics Cyclical Pent-Up Demand Large Millennial cohort reaching prime household formation age Baby Boomers retiring triggering a shift in housing needs Cyclical Pent-Up Demand Home ownership rate at multi-decade low Foreclosure crisis over Large pool of renters ready to become homeowners Large number of young people ready to strike out What Has Not Changed Desire to become homeowners Hurdles to Home Ownership Down payment Debt Credit availability Lack of affordable housing inventory in both new and pre-owned market We are Optimistic about Housing and Mortgage Market Housing and Mortgage Market

Foreclosure Crisis Over Housing and Mortgage Market

First-Time Homebuyer Market Housing and Mortgage Market

Housing Demand 2MM Millennial Babies 11MM Boomers 3MM More Than Normal 6MM Millennials Source: Household formation for 1950-2010 based on Census Bureau Decennial Census, 2011-14 based on the average of Housing Vacancy Survey and American Community Survey; Lifetime Intentions to Own a Home Among Renters based on Fannie Mae National Housing Survey. Housing and Mortgage Market

Housing Supply Housing and Mortgage Market

Housing Vacancy Levels Housing and Mortgage Market

Home Sales Housing and Mortgage Market

Migration a Key Driver for State Population Population Growth (2009 – 16) US: 5.3% Housing and Mortgage Market

Population Growth – 2016 US: 2,200K Housing and Mortgage Market

Slower Job Growth Source: Bureau of Labor Statistics Housing and Mortgage Market

Job Growth in Pennsylvania Source: Bureau of Labor Statistics Housing and Mortgage Market

Job Growth Mixed at Industry Level Source: Bureau of Labor Statistics Housing and Mortgage Market

Home Ownership Rate Premium Shrinking Housing and Mortgage Market

New Construction Permit (y/y %) YTD: 15% SF: 12% MF: 23% Source: Census Bureau Housing and Mortgage Market

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