1. By Kent Colton, PhD, Gopal Ahluwalia and Jay Shackford January 11, 2013 Copyright 2013 The Colton Housing Group

2. Source: U.S. Census Bureau *Forecast by Colton, Ahluwalia and Shackford 2 Chart 1 Copyright 2013 The Colton Housing Group

3. Source: U.S. Census Bureau *Forecast by Colton, Ahluwalia and Shackford 3 Chart 2 Copyright 2013 The Colton Housing Group

4. Source: U.S. Census Bureau *Forecast by Colton, Ahluwalia and Shackford 4 Chart 3 Copyright 2013 The Colton Housing Group

5. Source: National Association of Realtors *Forecast by Colton, Ahluwalia and Shackford 5 Chart 4 Copyright 2013 The Colton Housing Group

6. Source: U.S. Census Bureau 6 Chart 5 Copyright 2013 The Colton Housing Group

7. Source: 7 Chart 6 Copyright 2013 The Colton Housing Group Total StartsAverage Annual Starts S.F.M.F.TotalS.F.M.F.Total 1982-19865,0662,9968,0621,0135991,612 1987-19914,9651,7256,6909933451,338 1992-19966,5911,1847,7951,3182371,555 1997-20016,2111,6927,9031,2423381,580 2002-20067,6501,7289,3781,5303461,876 2007-20113,0159954,010603199802

8. *June 2010 Source: U.S. Census Bureau 8 Chart 7 Copyright 2013 The Colton Housing Group

9. * June 2010 Source: U.S. Census Bureau 9 Chart 8 Copyright 2013 The Colton Housing Group

10. 10 Chart 9 Copyright 2013 The Colton Housing Group million 18.3 % 12% 14.2% million * “ Doubled-up” households are defined as those that include at least one “additional” adult - in other words, a person 18 years or older who is not enrolled in school and is not the householder, spouse, or cohabitating partner of the household. Source: U.S. Census Bureau Households that are doubling up

11. 11 Copyright 2013 The Colton Housing Group million 27.7% 30% Chart 10 Source: U.S. Census Bureau

12. Source: Demographic Challenges & Opportunities for U.S. Housing Market. Prepared for the Bipartisan Policy Center, March 2012 12 Chart 11 Copyright 2013 The Colton Housing Group Householder Age OBSERVEDLOWMEDIUMHIGH 199020002010202020302020203020202030 15-244,7635,5345,4015,2475,5705,5985,5915,9506,332 25-3419,88418,29817,95717,22217,13318,41019,57819,59822,194 35-4420,32723,96821,29121,70320,06422,14121,90222,57923,812 45-5414,40521,29324,90722,27122,43822,41523,04822,55823,666 55-6412,36414,24721,34024,15522,01824,26722,27524,36522,517 65-7411,62511,50813,50520,39522,74620,55523,04020,69923,302 75-846,7568,2058,71610,84816,09310,97816,41311,10916,723 85+1,6482,4283,5994,5946,1684,6556,3274,7156,488 TOTAL 91,771105,480116,716126,435132,229129,019138,533131,573145,034

13. GenerationPopulation in millions) Education (some college) MarriedHave Children Lived with at Least One Family Member <17 years old61 Echo Boomers (1981-1995) (17-31 yrs old) 6554%21%20%47% Baby Bust (1965-1980) (32-46 yrs old) 6149% 29% (at this stage) 43% Baby Boomers8136% 50% (at this stage) 30%39% Seniors (Before 1946) 44 13 Chart 12 Notes:  Generational shifts will have significant impact on housing in next two decades.  Echo Boomers represent a long term opportunity for housing recovery but they are struggling in job market and the present economic environment.  According to NAR Survey 2011 profile of home buyers/sellers 18-34 year olds represent 31% of all recent purchases.  Echo Boomers are more racially and ethnically diversified than Baby Boomers (65% of the Baby Boomers are, and 55% of Echo Boomers are Caucasians). Echo Boomers are more likely to be college educated – have better potential than previous generation. Echo Boomers are marrying later and have children later. Copyright 2013 The Colton Housing Group

14. * Rate in 3 rd Qtr 2012 Source: U.S. Census Bureau 14 Chart 13 Copyright 2013 The Colton Housing Group

15. YearAnnual RateYearAnnual Rate 2012*65.5200167.8 201166.2200067.4 201066.9199966.8 200967.4199866.3 200867.8199765.7 200768.2199665.4 200668.8199564.8 200568.9199464.0 200469.0199364.0 200368.3199264.1 200268.0199164.1 * Annual Rate 3 rd Qtr 2012 Source: U.S. Census Bureau 15 Chart 14 Copyright 2013 The Colton Housing Group

16. Source: U.S. Housing Market Conditions/HUD 16 Chart 15 Copyright 2013 The Colton Housing Group 19851990199520002005201020112012* Change in homeownership 2005-3 rd Qtr 2012 Less than 35 yrs39.9%38.5%38.6%40.8%43.0%39.1%37.8%36.3%-6.7% 35-44 yrs68.1%66.3%65.2%67.9%69.3%65.0%63.5%61.8%-7.5% 45-54 yrs75.9%75.2% 76.5%76.6%73.5%72.7%72.0%-4.6% 55-64 yrs79.5%79.3%79.5%80.3%81.2%79.0%78.5%76.9%-4.3% 65 yrs and over74.8%76.3%78.1%80.4%80.6%80.5%80.9%81.4%+0.8% U.S.63.9% 64.7%67.4%68.9%66.9%66.4%65.5%-3.4% Note: Homeownership rate declined from peak of 68.9% in 2005 to 65.5% (decline of 3.4%) in 3 rd Qtr 2012. The decline in homeownership varies significantly among different population segments. Among less than 35 years old, homeownership declined from43.0% in 2005 to 36.3% in 3 rd Qtr 2012 (decline of 6.7%) and among 35-44 years old, homeownership declined from 69.3% in 2005 to 61.8% in 3 rd Qtr 2012 (decline of 7.5%).

17. Source: Federal Housing Finance Agency 17 Chart 16 Copyright 2013 The Colton Housing Group Los AngelesSacramentoLas Vegas Riverside/San BernardinoPhoenixMiami Ft. LauderdaleWash DC 2000200,000 2005465,487444,958394,375471,000355,000444,000436,000443,000 2012332,000258,000178,000262,000218,000302,000294,000396,000 Los AngelesSacramentoLas Vegas Riverside/San BernardinoPhoenixMiami Ft. LauderdaleWash DC 2000-2005132.7%122.5%97.2%135.5%77.5%122.0%118.0%121.5% 2005-2012-28.7%-42.0%-54.9%-44.4%-38.6%-32.0%-32.6%-10.6% 2000-201266.0%29.0%-11.0%31.0%9.0%51.0%47.0%98.0% Percentage Change

18. Source: Federal Housing Finance Agency 18 Chart 17 Copyright 2013 The Colton Housing Group AtlantaSeattleChicagoBostonRaleighDenverDallasHouston 2000200,000 2005247,000297,000301,000347,000234,000254,000238,000247,000 2012180,000269,000225,000311,000254,000257,000256,000298,000 AtlantaSeattleChicagoBostonRaleighDenverDallasHouston 2000-200523.5%48.5%50.5%73.5%17.0%27.0%19.0%23.5% 2005-2012-27.1%-9.4%-25.2%-10.4%8.5%1.2%7.6%20.6% 2000-2012-10.0%34.5%12.5%55.5%27.0%28.5%28.0%49.0% Percentage Change

19. 19 Chart 18a Sources: SP/Case-Shiller top 10 and 20 market indexes through 3 rd qtr 2012 (base year 2000) (base year 2000). Copyright 2013 The Colton Housing Group

20. 20 Chart 18b Note: 10-city and 20-city composite indexes are monthly, and chart shows change in price during first twelve months starting from January 2001 over January 2000. National index on the right scale is quarterly index, and chart shows change in prices during first quarter 2001 over first quarter 2000 and so on. Copyright 2013 The Colton Housing Group

21. Note: Index calculates the share of homes actually sold that a household earning the median income could afford to buy. Source: NAHB * 3 rd Qtr 2012 21 Chart 19 Copyright 2013 The Colton Housing Group

22. 22 Copyright 2013 The Colton Housing Group

23. 23 Chart 21 Copyright 2013 The Colton Housing Group

24. Source: Inside Mortgage Finance 24 Chart 22 Copyright 2013 The Colton Housing Group

25. * 1st Quarter 2012 Source: Mortgage Bankers Association 25 Chart 23 Copyright 2013 The Colton Housing Group

26. 26 Source: American Housing Survey, 2009, Department of Housing and Urban Development; First American CoreLogic (2 nd Qtr 2012) Chart 24 Copyright 2013 The Colton Housing Group

27. 27 Chart 25 Source: First American CoreLogic (2 nd Qtr 2012) Copyright 2013 The Colton Housing Group

28. 28 Chart 26 Source: First American CoreLogic (2 nd Qtr 2012) Copyright 2013 The Colton Housing Group

29. 29 Chart 26 cont. Source: First American CoreLogic (2 nd Qtr 2012) Copyright 2013 The Colton Housing Group

30. Source: BUILDER magazine 30 Chart 27 Copyright 2013 The Colton Housing Group

31. Source: U.S. Census Bureau 31 Chart 28 Square Feet Copyright 2013 The Colton Housing Group

32. Source: U.S. Census Bureau 32 Chart 29 Copyright 2013 The Colton Housing Group

33. Source: Federal Reserve Board 33 Chart 30 Copyright 2013 The Colton Housing Group *Note: During 3 rd Qtr 2012 homeowners equity increased by $1.2 trillion over 3 rd Qtr 2011.

34. Source: U.S. Census Bureau 34 Chart 31 Copyright 2013 The Colton Housing Group Unemployment Rate (% - Axis Inverted)

35. Copyright 2013 The Colton Housing Group 35 * 2 nd Qtr 2012 Source: Bureau of Economic Analysis, Department of Commerce Chart 32

36. Copyright 2013 The Colton Housing Group 36 * 2 nd Qtr 2012 Source: Bureau of Economic Analysis, Department of Commerce Chart 33

37. 37 Chart 34 Copyright 2013 The Colton Housing Group

38. 38 Chart 35 Copyright 2013 The Colton Housing Group

39. 39 Note: In 2008, 2009, and 2010, over 95% of all mortgage backed securities have passed through Fannie Mae, Freddie Mac and Ginnie Mae. Source: Inside Mortgage Finance Housing Finance Copyright 2013 The Colton Housing Group Chart 36

40. 40 Source: The State of the Nation’s Housing, 2010. Joint Center for Housing Studies of Harvard University, Table A-6, Page 39. Chart 37 Foreclosure Rate Share of US Loans in Foreclosure Share of US Households with Mortgages Foreclosure Rate Share of US Loans in Foreclosure Share of US Households with Mortgages United States4.6100.0 Missouri2.10.92.1 Florida14.023.66.2Louisiana3.40.81.2 California5.214.810.2Utah3.40.70.9 Illinois5.85.04.5Kentucky3.30.71.4 New York4.3 5.0Oklahoma3.00.61.1 New Jersey6.23.92.9Alabama2.20.61.5 Ohio4.93.54.2Idaho3.70.5 Arizona5.93.42.1Iowa2.80.51.1 Georgia3.93.23.3Hawaii4.80.40.3 Texas2.13.26.8Mississippi3.10.40.8 Michigan4.43.03.7New Mexico3.10.40.6 Nevada10.42.80.9Kansas2.30.41.0 Pennsylvania2.92.34.3Maine4.60.30.5 Maryland4.02.12.2Delaware3.70.3 Indiana4.51.92.4Arkansas2.10.30.9 North Carolina2.31.63.2Rhode Island3.60.20.3 Minnesota3.31.52.2New Hampshire2.60.20.5 Virginia2.11.52.9Nebraska1.90.20.6 Massachusetts3.41.42.2District of Columbia3.00.10.2 Colorado2.81.41.9Vermont2.70.10.2 Washington2.31.32.4West Virginia2.20.10.6 Wisconsin3.51.22.1Montana1.90.10.3 South Carolina3.41.11.5South Dakota1.80.10.3 Connecticut3.91.01.3Wyoming1.70.10.2 Oregon3.31.01.3Alaska1.30.10.2 Tennessee2.41.02.1North Dakota1.20.00.2 Copyright 2013 The Colton Housing Group

41. U.S. Population is Growing –- About 30 million between 2010 and 2020 41 Source: U.S. Census Bureau. Chart 38 200020102020 (est.) 2 Less than 15 years606264 15-34 Yrs (Gen Y-Born 1975-1994)79 124 1 85 127 1 138 35-44 yrs (Gen X-Born 1965-1974)4542 45-54 yrs (Baby Boomers-Born 1955-1964)3845 84 55-64 yrs (Baby Boomers-Born 1946-1954)2436 65 yrs or older (Born before 1946)354055 282310341 1 Total of 15-34 years and 35-44 years. 2 341 million estimate by U.S. Census Bureau. Breakdown of estimates, in part, by Colton, Ahluwalia, and Shackford. 2000 – 2010 – Estimated 2020 (in millions) Copyright 2013 The Colton Housing Group

42. 42 Chart 39 Copyright 2013 The Colton Housing Group * 3 rd Qtr 2012