November 2022 – Page 2

US Mortgage Delinquencies Remain Near Historic Low in September

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The overall delinquency rate dropped for the 18th straight month on an annual basis CoreLogic, a leading global property information, analytics and data-enabled solutions provider, released its monthly Loan Performance Insights Report for September 2022. For the month of September, 2.8% of all mortgages in the U.S. (approximately 1.4 million loans) were in some stage of delinquency (30 days or more past due, including those in foreclosure), representing a 1.1 percentage point decrease compared to 3.9% in September 2021. To gain a complete view of the mortgage market and loan performance health, CoreLogic examines all stages of delinquency. In September 2022, the U.S. delinquency and transition rates, and their year-over-year changes, were as follows: Overall U.S. mortgage delinquencies again hovered near record lows in September, with every state and all but one metro in Illinois posting at least slight annual declines. However, with a potential recession and projected increase in the national unemployment rate looming, some uptick in delinquency rates could be expected in 2023. That said, 99% of homeowners with a mortgage have locked in rates below 6%. As a result, even if delinquency activity posts a minor increase, it is unlikely to cause the type of housing downturn seen during the Great Recession, when questionable underwriting practices allowed buyers to take out mortgages that exceeded their budgets. “All stages of delinquency remained low in September,” said Molly Boesel, principal economist at CoreLogic. “Early-stage, overall and serious delinquencies were either at or below their pre-pandemic rates. Low unemployment, which has also returned to the level seen before the COVID-19 outbreak, is contributing to strong mortgage performance. However, if the U.S. enters a recession, increases in delinquency rates can be expected.” State and Metro Takeaways: The next CoreLogic Loan Performance Insights Report will be released on December 29, 2022, featuring data for October 2022. For ongoing housing trends and data, visit the CoreLogic Intelligence Blog: www.corelogic.com/intelligence. Source: CoreLogic

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Housing Sales Forecasted to Hit Trough in Q2 2023 Before Beginning to Rebound After rebounding at a 2.6 percent annualized rate in Q3 2022 on the strength of net exports, real gross domestic product (GDP) is projected to turn negative again in the fourth quarter as the temporary boost from international trade moderates, according to the November 2022 commentary from the Fannie Mae (OTCQB: FNMA) Economic and Strategic Research (ESR) Group. The ESR Group also expects declines in residential fixed and business investment, as well as slowing personal consumption growth, to contribute to negative growth in Q4 2022, and it continues to expect the economy to tip into a modest recession in the first quarter of 2023. Full-year 2022 GDP growth is now expected to be 0.0 percent, an upgrade of one-tenth from the previous forecast, while forecasted 2023 GDP was downgraded by one-tenth to a 0.6 percent contraction. Additionally, the ESR Group’s inaugural forecast for 2024 shows economic growth rebounding to 2.0 percent on a Q4/Q4 basis, reflecting the beginning of an expected economic recovery. Finally, although inflation showed signs of cooling in October, the possibility of a strong labor market contributing to more persistent wage pressures in the future suggests to the ESR Group that the Federal Open Market Committee (FOMC) will once again raise the federal funds rate at its next meeting, and it forecasts the federal funds rate topping out at approximately 5.0 percent in early 2023. The ESR Group made only modest updates to its forecast of total single-family home sales in 2022 and 2023, which are projected to be 5.67 million and 4.42 million, respectively. In 2024, single-family home sales are expected to rebound 18.6 percent from the year prior to 5.25 million, reflecting an anticipated modest pullback in mortgage rates, the broader economic recovery, and a continued lack of housing supply that should support new home construction. A significant contributor to the ESR Group’s pessimistic home sales path remains the so-called “lock-in effect,” in which homeowners have a significant financial disincentive to move because they hold mortgages well below current market rates. Right now, the ESR Group estimates that, as of October month-end, more than 80 percent of borrowers had a mortgage rate at least 200 basis points below current market rates, by far the largest share in decades. “The economy continues to slide toward a modest recession, which we anticipate will begin in the new year, with housing leading the slowdown,” said Doug Duncan, Senior Vice President and Chief Economist, Fannie Mae. “Higher interest rates have ignited the typical reduction in residential fixed investment, which historically has led into either an economic slowdown or recession. From our perspective, the good news is that demographics remain favorable for housing, so the sector appears well-positioned to help lead the economy out of what we expect will be a brief recession.” Visit the Economic & Strategic Research site at fanniemae.com to read the full November 2022 Economic Outlook, including the Economic Developments Commentary, Economic Forecast, Housing Forecast, and Multifamily Market Commentary. To receive e-mail updates with other housing market research from Fannie Mae’s Economic & Strategic Research Group, please click here. Opinions, analyses, estimates, forecasts, and other views of Fannie Mae’s Economic & Strategic Research (ESR) group included in these materials should not be construed as indicating Fannie Mae’s business prospects or expected results, are based on a number of assumptions, and are subject to change without notice. How this information affects Fannie Mae will depend on many factors. Although the ESR group bases its opinions, analyses, estimates, forecasts, and other views on information it considers reliable, it does not guarantee that the information provided in these materials is accurate, current or suitable for any particular purpose. Changes in the assumptions or the information underlying these views could produce materially different results. The analyses, opinions, estimates, forecasts, and other views published by the ESR group represent the views of that group as of the date indicated and do not necessarily represent the views of Fannie Mae or its management. About the ESR GroupFannie Mae’s Economic and Strategic Research Group, led by Chief Economist Doug Duncan, studies current data, analyzes historical and emerging trends, and conducts surveys of consumer and mortgage lender groups to provide forecasts and analyses on the economy, housing, and mortgage markets. The ESR Group was recently awarded the prestigious 2022 Lawrence R. Klein Award for Blue Chip Forecast Accuracy based on the accuracy of its macroeconomic forecasts published over the 4-year period from 2018 to 2021. About Fannie MaeFannie Mae advances equitable and sustainable access to homeownership and quality, affordable rental housing for millions of people across America. We enable the 30-year fixed-rate mortgage and drive responsible innovation to make homebuying and renting easier, fairer, and more accessible. To learn more, visit: fanniemae.com | Twitter | Facebook | LinkedIn | Instagram | YouTube | Blog

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Trader Joe’s leads the pack for homeowners, while ALDI wins among investors; Average home value near Trader Joe’s is $987,923, compared to $891,416 near Whole Foods and $321,116 near ALDI ATTOM, a leading curator of real estate data nationwide for land and property data, released its 2022 Grocery Store Wars analysis, which shows how living near a Trader Joe’s, a Whole Foods or an ALDI might affect a home’s value – as a homebuyer based on home price appreciation and home equity, or as an investor looking for the best home flipping returns and home seller ROI. For this analysis, ATTOM looked at current average home values, 5-year home price appreciation for YTD 2022 vs. YTD 2017, current average home equity, home seller profits, and home flipping rates in U.S. zip codes with a least one Whole Foods store, one Trader Joe’s store and one ALDI store. (See full methodology enclosed below.) Click here to view the infographic illustrating the results of this analysis. “Smart homebuyers might want to consider where they’ll do their grocery shopping when they’re shopping for a new home.” said Rick Sharga, executive vice president of market intelligence at ATTOM. “It turns out that being located near grocery stores isn’t only a matter of convenience for homeowners but can have a significant impact on equity and home values as well. And that impact can vary pretty widely depending on which grocery store is in the neighborhood.” For Homeowners While homes near a Trader Joe’s realized an average 5-year home price appreciation of 49 percent, and homes near a Whole Foods saw an average appreciation of 45 percent, ALDI had a slight advantage at 58 percent. However, not only does Trader Joe’s lead the pack for homeowners with an average home value at $987,923, but it also takes the lead in home equity with homeowners earning an average of 50 percent ($520,842) equity, compared to Whole Foods at 45 percent ($433,311) and ALDI at 38 percent ($132,643). The average value for homes near a Whole Foods is $891,416, and $321,116 for homes near an ALDI. For Investors Properties near an ALDI are ripe for investors, with an average gross flipping ROI of 54 percent, compared to properties near a Whole Foods which had an average gross flipping ROI of 28 percent and Trader Joe’s at 25 percent. Properties near an ALDI have an average home seller ROI of 61 percent, while properties near a Trader Joe’s sit at 58 percent, and 51 percent for properties near a Whole Foods. Report methodology For this analysis ATTOM looked at current average home values, 5-year home price appreciation for YTD (Q1-Q3) 2022 vs. YTD (Q1-Q3) 2017, current average home equity, home seller profits, and home flipping rates in U.S. zip codes with a least one Whole Foods store, one Trader Joe’s store and one ALDI store. Grocery store locations are from the USDA (http://www.fns.usda.gov/snap/retailerlocator).

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Offerpad Solutions Inc. (“Offerpad” or the “Company”) (NYSE:OPAD), a leading tech-enabled platform for residential real estate, announced that it received notice from the New York Stock Exchange (the “NYSE”) that it is not in compliance with Section 802.01C of the NYSE Listed Company Manual because the average closing price of the Company’s Class A common stock was less than $1.00 over a consecutive 30 trading-day period. The notice does not result in the immediate delisting of the Company’s Class A common stock from the NYSE. On November 16, 2022, the Company notified the NYSE that it intends to cure the stock price deficiency and to return to compliance with the NYSE continued listing standard. The Company can regain compliance at any time within the six-month period following receipt of the NYSE notice if on the last trading day of any calendar month during the cure period the Company has a closing share price of at least $1.00 and an average closing share price of at least $1.00 over the 30 trading-day period ending on the last trading day of that month. The Company intends to consider available alternatives, including, but not limited to, a reverse stock split, subject to stockholder approval no later than at the Company’s next annual meeting of stockholders, if necessary to cure the stock price non-compliance. Under the NYSE’s rules, if the Company determines that it will cure the stock price deficiency by taking an action that will require stockholder approval at its next annual meeting of stockholders, the price condition will be deemed cured if the price promptly exceeds $1.00 per share, and the price remains above that level for at least the following 30 trading days. The Company’s Class A common stock will continue to be listed and trade on the NYSE during this period, subject to the Company’s compliance with other NYSE continued listing standards.

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New survey from Zillow Home Loans shows home buyers don’t shop around for their mortgage, potentially costing them hundreds of dollars each month A new survey by Zillow Home Loans finds prospective home buyers spend about as much time researching their next TV purchase and more time researching their next vacation or car purchase than they do their mortgage lender. Additionally, 72% of prospective buyers have not shopped around, nor have any plans to shop around, for a mortgage that best suits their financial situation. According to the survey, 28% of prospective buyers spent at least a month researching vehicles for their next car purchase, but only 13% said they spent that much time researching mortgage lenders before applying. Twenty three percent of prospective buyers spent at least a month researching their vacation options before booking, and 12% spent at least a month researching a new TV before purchasing. The survey shows nearly half (46%) of prospective buyers who submitted applications for mortgage pre-approval only submitted one application. Now that housing affordability is at its lowest point in decades and mortgage rates have jumped significantly in just the past six months, it’s more important than ever for home buyers to understand their mortgage options and find a loan that best meets their personal financial needs. Zillow research finds prospective home buyers who don’t shop around could end up spending tens of thousands of dollars more over the course of their mortgage. “Home buyers should take the time necessary to make an educated decision on their mortgage. It’s often the largest financial decision someone makes. Taking time to understand their credit report, repair any issues and consult with a qualified mortgage professional can make a significant difference in a home shopper’s experience,” said Libby Cooper, vice president of Zillow Home Loans. “Buyers often don’t understand that a loan officer can be a partner in the home-buying process. They help discuss options and find the right fit for a customer’s personal financial situation. Zillow Home Loans can help home buyers educate themselves and head into their home purchase feeling more confident in this significant financial decision.” A lack of understanding about mortgage applications is what most often drives people to skip the research. The top reason prospective home buyers indicated they haven’t or would not shop around for their mortgage was a concern that it would hurt their credit score (30%). While mortgage pre-approval can impact a credit score, buyers can shop and submit multiple applications over 45 days with only one hit to their credit score. Another Zillow survey found that 86% of sellers prefer a buyer who has been pre-approved, as opposed to pre-qualified, for a mortgage. Pre-approval includes the financial history (including income, assets, debts and credit score) that are requested during pre-qualification, but usually also requires documentation to support the information provided and a credit check. The financial check provided by pre-approval can give sellers more certainty that a buyer will close on time, and it allows buyers to make a stronger, faster offer the minute the right home hits the market. It is important for borrowers to understand how preparing to apply for a mortgage can significantly impact the mortgage interest rate they will ultimately qualify for. Taking the time to understand your credit report, fixing any errors that may exist and paying down existing debt will change what you pay for your home. A recent Zillow analysis showed that, nationally, buyers with “fair” credit could be paying hundreds more on their monthly mortgage payment than those with “excellent” credit. Thirty-four percent of prospective buyers did not spend time preparing before applying for mortgage pre-approval, mortgage pre-qualification or a mortgage, and nearly half of those (49%) spent less than a year prepping. The buyer’s preparations could include things like taking necessary steps to improve credit scores and saving for a higher down payment. Home buyers looking to purchase in the next year can take steps to research and prepare for their mortgage as they get started on their home-financing journey, including: SOURCE Zillow Home Loans