Housing and Economic Outlook National Association of Local Housing Finance Agencies April 26, 2012 David Crowe Chief Economist

Builder Sentiment Up since September 2011 NAHB/Wells Fargo Housing Market Index

NAHB/Wells Fargo Housing Market Index

Quarterly Data Message

Total Payroll Employment

Unemployment Rate

Total Personal Income Feb ‘12 = 2.6%

Real Gross Domestic Product

Consumer Confidence Index

Single-family Building Permits

Multifamily Building Permits

Underlying Fundamentals

Number of Households Percentage Change (million households) 1 to 2 million gap Household Shortfall Demographic Trends Are Positive

Housing Fundamentals Remain Good Mortgage Rates

House Prices At Long-term Ratio House Price-to-Income Ratio

Markets Are Local

Seriously Delinquent Loans Trending Lower Mortgages 90+ days delinquent or in foreclosure, % of all loans

But Delinquency Inventory Varies by State Foreclosure inventory plus 90-day+ delinquencies U.S. = 8.4 months Foreclosure inventory plus 90-day+ delinquencies month’s supply at annual sales rate

Increase in Employment Greater Than National Average Change in Employment Below U.S. average 0.6% to < 0.9% 0.9% to < 1.3% 1.3% to < 1.8% 1.8% or greater

Increase in Building Permits Greater Than National Average Change in Building permits Below U.S. average 6.7% to < 11.7% 11.7% to < 18.3% 18.3% to < 31.2% 31.2% or greater

Change in House Prices Relative to U.S. Change in House prices Below U.S. average -4.2% to < -2.8% -2.8% to < -1.7% -1.7% to < -0.6% -0.6% and greater

NAHB/First American Improving Markets Index – The Number of Markets is Improving

ARLittle RockFLTampaMDCumberlandNCCharlotteOHSpringfieldTXCollege Station CAFresnoGARomeHagerstownGoldsboroOKTulsaDallas CAMercedIAAmesMELewistonGreensboroORCorvallisLaredo COBoulderDes MoinesMIDetroitGreenvilleORPortlandLongview DenverDubuqueFlintRocky MountPAAltoonaMcAllen Fort CollinsIowa CityGrand RapidsWinston-SalemErieMidland GreeleySioux CityLansingNDBismarckLancasterOdessa CTNew HavenWaterlooMonroeFargoPittsburghSan Antonio DCWashingtonIDBoise CityMuskegonGrand ForksWilliamsportTyler FLCape CoralCoeur d’AleneSaginawNELincolnSCCharlestonVictoria CrestviewINElkhartMNMinneapolisNJOcean CitySpartanburgUTProvo DeltonaEvansvilleMOColumbiaNYBuffaloSDSioux FallsSt. George JacksonvilleIndianapolisJefferson CityGlens FallsTNChattanoogaVTBurlington North PortLafayetteJoplinRochesterKingsportWVHuntington OrlandoKYLouisvilleKansas CityUticaNashvilleWYCasper Panama CityLALake CharlesMSJacksonOHColumbusTXAmarilloCheyenne Punta GordaMonroeNCBurlingtonDaytonBrownsville 101 Improving Metropolitan Areas

Improving Markets 101 Improving Metropolitan Areas

Forecast

Real GDP Growth – Hesitated but Improving

Sales Dipped, But Due to Recover New and Existing Single-Family Home Sales

Single-Family Starts – Waiting for Job Recovery Trough to Current: Mar 09 = 353,000 Mar 12 = 462, % ,256, , ,000-8% ,00017% ,00030%

Multifamily Housing Starts Healthy Response from Growth in Renters Trough to Current: 4 th Q 09 = 82,000 1 st Q 12 = 192, % , , ,00055% ,00022% ,0009%

Residential Remodeling – Continuous Improvement Owner-Occupied Improvements Billions 2005 $, SAAR Source: U.S. Census Bureau, NAHB Economic and Housing Forecast.

Long Road Back to Normal* for Single-Family Housing Starts – Q * Normal is the average from Q to Q * Normal Production is measured as Single- Family housing starts between Q and Q Single-Family Housing Starts Relative to Normal Less than 45% 45% to 49% 49% to 61% 61% to 70% Greater than 70%

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