2024 – Page 19

Sluggish Home Sales Expected as Consumers Hold Out for Improved Affordability

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Despite Recent Decline in Mortgage Rates, Existing Home Sales Likely to Remain Weak Despite the recent pullback in mortgage rates, total home sales are expected to come in lower than previously forecast through the rest of 2024, and then not pick up meaningfully until further out in 2025, according to the August 2024 commentary from the Fannie Mae (OTCQB: FNMA) Economic and Strategic Research (ESR) Group. The ESR Group notes that purchase mortgage applications have barely budged in response to the more favorable rate environment, and high-frequency measures of home purchase demand, including mortgage applications, showing requests, and listings views, remain below year-ago levels. Additionally, the Fannie Mae Home Purchase Sentiment Index® continues to report a near-record low share of respondents indicating it’s a “good time to buy” a home. As such, the ESR Group has downgraded its total home sales forecast to 4.78 million in 2024 and 5.19 million in 2025, with the expectation that homebuying will not pick up meaningfully until income growth begins to outpace home price growth and mortgage rates move closer to 6.0 percent. On the new home side, the ESR Group continues to expect comparative strength relative to existing home sales as strong builder margins are likely to drive concessions in the quarters ahead. However, a near-term slowdown in starts is expected, as the number of new homes for sale that are already under construction has risen, likely delaying new projects until this inventory can be sold. The ESR Group forecasts mortgage rates to average 6.4 percent by the end of 2024 and 5.9 percent by the end of 2025. On the macroeconomic side, the ESR Group upgraded its 2024 real gross domestic product (GDP) outlook to 1.9 percent from 1.6 percent due to the stronger-than-expected second quarter GDP reading. However, a slowdown in growth is still expected given the historically low savings rate and the relatively weak July employment report, which showed the unemployment rate up six-tenths from the beginning of the year to 4.3 percent. The ESR Group continues to expect a soft landing as their base case forecast but notes that the odds of an economic downturn have likely increased given the historical relationship between sharp rises in the unemployment rate and previous business cycles. “After absorbing recent economic data, bond market participants now appear to expect slower paths for economic growth and inflation, which contributed to a softening in mortgage rates over the last few weeks,” said Mark Palim, Fannie Mae Vice President and Deputy Chief Economist. “On its face, the lower rate environment should be good for home sales by helping loosen the grip of the so-called ‘lock-in effect,’ in addition to aiding affordability more generally. However, high-frequency data, such as mortgage applications, home showing requests, and listings views, suggest that many potential homebuyers remain reluctant to make the jump. Even with moderately lower mortgage rates, affordability remains close to historic lows due to the high level of home prices relative to incomes. We are therefore expecting continued sluggishness in home sales over the rest of the year. One bright spot for the mortgage industry has been the recent uptick in refinance applications, albeit from very low levels.” Visit the Economic & Strategic Research site at fanniemae.com to read the full August 2024 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. Fannie Mae Resource Center1-800-2FANNIE SOURCE Fannie Mae

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Abandoned Homes in Foreclosure Down 20 Percent Annually; Only One in 14,800 U.S. Homes Sit Empty in Foreclosure, Matching Three-Year Low; Zombie-Property Trends Come Amid Decline in Lenders Going After Delinquent Homeowners ATTOM, a leading curator of land, property, and real estate data, released its third-quarter 2024 Vacant Property and Zombie Foreclosure Report showing that 1.4 million (1,357,423) residential properties in the United States are vacant. That figure represents 1.3 percent, or one in 76 homes, across the nation – roughly the same as in the second quarter of this year. The report analyzes publicly recorded real estate data collected by ATTOM — including foreclosure status, equity and owner-occupancy status — matched against monthly updated vacancy data. The report also reveals that 222,934 residential properties in the U.S. are in the process of foreclosure in the third quarter of this year, down 6 percent from the second quarter of 2024 and down 29.3 percent from the third quarter of 2023. Foreclosure activity has declined over the past year following a surge in cases that hit after a nationwide moratorium on lenders pursuing delinquent homeowners, imposed during the Coronavirus pandemic, was lifted in the middle of 2021. Among those pre-foreclosure properties, about 7,000 sit vacant as zombie foreclosures (pre-foreclosure properties abandoned by owners) in the third quarter of 2024. That figure is slightly above the number in the prior quarter, but down 20.2 percent from a year ago. The latest count of zombie homes continues a long-term pattern of those properties representing only a tiny portion of the nation’s total housing stock – currently at just one of every 14,776 homes around the U.S. The ratio is about the same as the level of one in 14,724 in the prior quarter, but well down from one in 11,565 in the third quarter of last year, marking the lowest level since early 2021. Zombie foreclosures remain so rare that most local housing markets around the country have little or no issues with the blight and decay those properties can attract and spread. The portion of pre-foreclosure properties that have been abandoned into zombie status, meanwhile, ticked up a bit, from 2.9 percent in the second quarter of 2024 to 3.1 percent in the current quarter. “Zombie foreclosures continue to be a mere blip on the radar screen – one of many measures of the overall strength of the U.S. housing market. After some worries about a rise in abandoned homes following the end of the COVID-era foreclosure clampdown, they remain an anomaly throughout most of the country,” said Rob Barber, CEO for ATTOM. “One significant factor is the historically high levels of home equity. This provides homeowners who may be struggling with their mortgage payments a strong incentive to negotiate new payment plans, which in turn reduces the number of foreclosures. As a result, fewer owners are simply walking away from their properties like so many did after the Great Recession of the late 2000s.” The hold-steady pattern of zombie properties during the third quarter comes as the nation’s housing market boom continues into its 13th year, reversing signs of a slowdown in 2023. The nationwide median home value shot up 6 percent, year over year, in the Spring of 2024, reaching a new high of $365,000, according to ATTOM’s home sales data. It has increased every year since 2011, more than doubling during that time. Those gains have led to historic improvements in homeowner equity, which has resulted in almost 95 percent of owners with mortgages having at least some equity built up and half owing less than 50 percent of the estimated value of their properties. Zombie foreclosures mostly unchanged quarterly around U.S. while down annually A total of 7,007 residential properties facing possible foreclosure have been vacated by their owners nationwide in the third quarter of 2024, up 0.9 percent from 6,945 in the second quarter of 2024 but down from 8,782 in the third quarter of 2023. The number of zombie properties stayed the same quarterly or went up slightly in 26 states – usually increasing by less than 20. The number declined in 24 states. The biggest percent decreases from the third quarter of 2023 to the third quarter of 2024 in states that had at least 50 zombie homes a year ago are in Connecticut (zombie properties down 79 percent, from 87 to 18) Oklahoma (down 78 percent, from 199 to 43), Iowa (zombie properties down 78 percent, from 290 to 64), North Carolina (down 74 percent, from 191 to 50) and New Mexico (down 74 percent from 95 to 25). The only annual increases among states that had at least 50 zombie foreclosures in the third quarter of 2023 have come in Florida (zombie properties up 64 percent, from 1,199 to 1,961), Texas (up 63 percent, from 112 to 183) and New Jersey (up 12 percent, from 205 to 230). Georgia’s number has stayed the same, at 85. Overall vacancy rates also about the same The vacancy rate for all residential properties in the U.S. has remained virtually the same for 10 quarters in a row, hovering around 1.3 percent. The latest figure of 1.31 percent (one in 76 properties) is up slightly from 1.26 percent in both the second quarter of 2024 and the third quarter of last year. States with the highest vacancy rates for all residential properties are Oklahoma (2.36 percent, or one in 42 homes, during the third quarter of this year), Kansas (2.32 percent, or one in 43), Missouri (2.11 percent, or one in 47), Alabama (2.09 percent, or one in 48) and West Virginia (2.08 percent, or one in 48). Those with the smallest overall vacancy rates are New Hampshire (0.35 percent, or one in 282 homes), Vermont (0.41 percent, or one in 243), New Jersey (0.43 percent, or one in 231), Idaho (0.5 percent, or one in 201) and Utah (0.65 percent, or one in 153). Other high-level findings from the third quarter of 2024: Media Contact:Megan Huntmegan.hunt@attomdata.com Data and Report Licensing:datareports@attomdata.com SOURCE ATTOM

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Home prices grew 0.2% in July—equal to the slowest pace since January 2023—with more than 40% of the most populous U.S. metros recording a drop in home prices U.S. home prices ticked up 0.2% for the second-consecutive month in July, on a seasonally adjusted basis, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. That’s equal to the smallest month over month increase since January 2023. On a year-over-year basis, home prices rose 6.8% in July, down from 7.3% in June and the lowest annual increase recorded since January. This is according to the Redfin Home Price Index (RHPI), which uses the repeat-sales pricing method to calculate seasonally adjusted changes in prices of single-family homes. The RHPI measures sale prices of homes that sold during a given period, and how those prices have changed since the last time those same homes sold. It’s similar to the S&P CoreLogic Case-Shiller Home Price Indices but is published more than one month earlier. July data covers the three months ending July 31, 2024. Home prices continue to inch up to all-time highs—albeit more slowly than in previous months—because there is still a shortage of homes on the market relative to buyer demand. Mortgage rates have fallen considerably in recent weeks, but that has not yet translated into a significant increase in buyers, which in turn has prevented prices from rising more quickly. “There aren’t enough sellers listing their homes to cause prices to fall and there aren’t enough buyers to create competition to drive prices up significantly,” said Redfin Senior Economist Sheharyar Bokhari. “Relatively low sales and gradual price increases will remain the status quo each month until one of those things changes.” Metro-Level Summary: Redfin Home Price Index, July 2024 Twenty (40%) of the 50 most populous U.S. metro areas recorded a seasonally adjusted drop in home prices in July, month over month. That number is up from only four metros recording a month-over-month decline in February. The biggest decline in July was in Austin, TX (-1.6%), followed by San Francisco (-1.1%) and Nassau County, NY (-0.7%). The highest month over month gains were recorded in Indianapolis (1.2%), Miami (1.2%) and San Antonio, TX (1.1%). To view the full report, including charts and additional metro-level data, please visit:https://www.redfin.com/news/home-price-index-july-2024 Contacts Redfin Journalist Services:Ally Braun, 206-588-6863press@redfin.com

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Midwest and Northeast ZIPs Dominate this Years List For the first time since Realtor.com®‘s inaugural Hottest ZIP Codes Report in 2017, one ZIP code, 43230, Gahanna, Ohio, took the No. 1 spot for a second consecutive year. In the 2024 report, we once again see this years’ hottest ZIPs located exclusively in the Midwest and the Northeast, as each of this year’s top markets attract buyers who are looking for a combination of value and desirability. “While we’ve seen big changes in the housing market, such as a growing number of homes for sale, this year’s hottest ZIP codes in America show common factors are driving interest in these highly competitive areas,” said Realtor.com® Chief Economist Danielle Hale. “Although mortgage rate relief is starting to materialize, this year’s hottest ZIPs reflect the focus on affordability that home shoppers have had over the last few years in the face of high housing costs. Concentrated in larger metros across the Northeast and Midwest, these top 10 ZIPs attracted highly qualified home buyers seeking more space without relinquishing proximity to urban amenities.” The 2024 Hottest ZIP Codes in America, in rank order, are: (Bolded ZIPs were on last years ranking, starred ZIPs represent metros that were on last years’ ranking) This year, the Northeast and Midwest dominate the list. Seven of the 10 hottest ZIP codes on the list are in the Northeast, with an impressive three Massachusetts ZIP codes, two New Jersey ZIP codes and one ZIP code each in New York and Pennsylvania. Philadelphia, Penn and Springfield, Mass metros are represented by a ZIP code on the Hottest Zips list for the first time in the data’s history. The Midwest holds three spots on the list with three ZIPs that were also on last year’s list. In fact, Columbus, Ohio has been a presence on the Hottest Zips list each year dating back to 2017. This is the second year in a row, and only the second time in the list’s history, that only two regions are represented on the top-10 list. The Southern and Western regions are not represented in this year’s ten hottest ZIPs as buyer interest has shifted away from the areas that are generally unaffordable, or have become less affordable due to significant price growth during the pandemic. The South in particular has seen a significant pick up in for-sale inventory, which has thinned out buyer demand on a per-property basis, cooling off and slowing down the region’s housing market. Gahanna Snags the Top Spot, AgainGahanna topped the list two years in a row. The Columbus area offers home shoppers the amenities and quality-of-life advantages of a larger town, but at a lower price point. Homes in this ZIP code were priced 11.0% below the metro’s average, and 19.4% below the national median in the first half of the year. The lifestyle and affordability available in ZIP 43230 (Gahanna, Ohio) drew the attention of shoppers in the New York City metro, though almost half of listing viewership came from within the metro. Value for EveryoneThis years’ hottest ZIP codes all offered some form of value for potential buyers. Compared to the greater U.S. housing market, and even the surrounding areas in which they sit, each of the top 10 have a lower median list price and/or median listing price per square foot. The Midwest zips, Columbus (ZIP 43230 in Gahanna, Ohio), Chicago (ZIP 46322 in Highland, Ind.), and St. Louis (ZIP 63021 in Ballwin, Mo.), on this year’s list were priced an average 24.6% lower than the national median in June. Three Northeast ZIPs Rochester, N.Y. (ZIP 14609 in central Rochester), Philadelphia-Camden-Wilmington, PA-NJ-DE-MD (ZIP 08054 in Mount Laurel, NJ) and Springfield, Mass. (ZIP 01085 in Westfield, Mass.), on this years’ list were priced an average 28.8% below the U.S. median in June. Even the list’s highest priced market in Basking Ridge, NJ (ZIP 07920), with a median listing price of $995,000 in June, was affordable relative to the larger New York City metro area. The median listing price per square foot in Basking Ridge was 33.6% below the surrounding metro’s average in June Highly CompetitiveCompetition for homes in this year’s hottest ZIPs has quickened the market pace. Homes in the hottest ZIPs spent an average 13 days on the market in June 2024, more than a month (-32 days) less than the national median. The high-stakes environment in these areas means that successful buyers are well-qualified and well-equipped to purchase a home. Successful buyers in these areas had an average credit score of 757 compared to the U.S.’ average of 734 as well as a 16.7% average down payment compared to the national average of 14.0% in the first half of 2024. Not only are homes going fast in these hottest markets, in the first four months of the year, homes sold for an average 3.3% over asking price while nationally homes sold for an average 2.3% under asking price in the same period. Read the full report and see how your zip compared: http://www.realtor.com/hottestzips SOURCE Realtor.com

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Foreclosure Starts Increase 18 Percent from Last Month; Completed Foreclosures Increase 14 Percent ATTOM, a leading curator of land, property, and real estate data, released its July 2024 U.S. Foreclosure Market Report, which shows there were a total of 31,929 U.S. properties with foreclosure filings — default notices, scheduled auctions or bank repossessions — up 15 percent from a month ago and up slightly by .2 percent from a year ago. “July’s foreclosure activity reflects a slight shift in the housing market,” said Rob Barber, CEO at ATTOM. “With an 18 percent increase in foreclosure starts and a 14 percent rise in completed foreclosures from last month, these shifts may highlight growing pressures in certain areas. However soaring home prices seem to continue and have spiked the value of homes across the nation, which boosts equity for homeowners at virtually every stage of paying off mortgages. Monitoring these next few months will help us better understand the implications for the real estate sector.” Delaware, Nevada, and Utah post highest foreclosure ratesNationwide, one in every 4,414 housing units had a foreclosure filing in July 2024. States with the highest foreclosure rates were Delaware (one in every 2,214 housing units with a foreclosure filing); Nevada (one in every 2,245 housing units); Utah (one in every 2,289 housing units); New Jersey (one in every 2,607 housing units); and Illinois (one in every 2,660 housing units). Among the 224 metropolitan statistical areas with a population of at least 200,000, those with the highest foreclosure rates in July 2024 were Provo-Orem, UT (one in every 940 housing units with a foreclosure filing); Macon, GA (one in every 1,167 housing units); Columbia, SC (one in every 1,587 housing units); Spartanburg, SC (one in every 1,895 housing units); and Atlantic City-Hammonton, NJ (one in every 1,910 housing units). Those metropolitan areas with a population greater than 1 million with the worst foreclosure rates in July 20244 were: Las Vegas, NV (one in every 2,089 housing units); Philadelphia, PA (one in every 2,197 housing units); Jacksonville, FL (one in every 2,274 housing units); Chicago, IL (one in every 2,279 housing units); and Riverside, CA (one in every 2,556 housing units). Greatest numbers of foreclosure starts in California, Florida, and TexasLenders started the foreclosure process on 21,870 U.S. properties in July 2024, up 18 percent from last month and up 4 percent from a year ago. States that had the greatest number of foreclosure starts in July 2024 included: California (2,342 foreclosure starts); Florida (2,339 foreclosure starts); Texas (2,222 foreclosure starts); Illinois (1,221 foreclosure starts); and New York (1,145 foreclosure starts). Those major metropolitan areas with a population greater than 1 million that had the greatest number of foreclosure starts in July 2024 included: New York, NY (1,286 foreclosure starts); Chicago, IL (1,555 foreclosure starts); Philadelphia, PA (782 foreclosure starts); Miami, FL (758 foreclosure starts); and Los Angeles, CA (689 foreclosure starts). Foreclosure completion numbers increase from last monthLenders repossessed 3,282 U.S. properties through completed foreclosures (REOs) in July 2024, up 14 percent from last month and down 2 percent from last year. States that had the greatest number of REOs in July 2024, included: New York (377 REOs); California (370 REOs); Illinois (221 REOs); Pennsylvania (219 REOs); and Michigan (212 REOs). Those major metropolitan statistical areas (MSAs) with a population greater than 1 million that saw the greatest number of REOs in July 2024 included: New York, NY (271 REOs); Chicago, IL (136 REOs); San Francisco, CA (104 REOs); Detroit, MI (100 REOs); and Los Angeles (97 REOs). Media Contact:Megan Huntmegan.hunt@attomdata.com SOURCE ATTOM

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Following Burnett v. NAR, Indigo provides real estate agents, buyers and sellers streamlined communications, bidding and negotiations to adapt to changes. Indigo, the market’s first AI-powered home transaction platform, launched with leading real estate agents and teams from Compass, Keller Williams, eXp, RE/MAX and more. Indigo is launching in Charlotte, N.C., with additional markets in the coming months. Indigo’s flagship offering, Home Checkout, elevates the industry from search portals to transaction platforms in order to bring unparalleled transparency to the market. Indigo’s Contracts AI and automation platform streamlines all communications, bidding and negotiations to deliver a delightful, transparent transaction experience for real estate agents, buyers and sellers. Harnessing AI to bring transparency to the market. In light of the landmark industry settlement to decouple commissions, a seismic shift in how agents work and engage with buyers and sellers is underway. Today, agents and their clients are experiencing major change, communication challenges and an existential fear of being left out of the new industry model. Indigo’s technology solves this new reality, and gives real estate professionals the power to lead the industry forward – bringing transparency, data intelligence and market-first offerings to their buyers and sellers. A typical home transaction has dozens of forms, with hundreds of pages across several people. Indigo’s AI automation converts contracts and processes into connected, intelligent workflows to save time, reduce human error and make the process intuitive. With the ability to map, extract and connect contracts automatically, Indigo is able to surface real-time trends from commission to offers. “As an independent platform, we help all market participants – real estate agents, buyers, and sellers – by facilitating an open, transparent home transaction. We believe this will be the new industry model. As the industry shifts from a search-centric to transaction-centric model, consumers and agents will demand a more accessible and intuitive experience,” said Shaival Shah, Co-Founder and CEO of Indigo. “To bring the new industry model to market, the information, real-time intelligence and decision-making capabilities must improve to facilitate the transparency the market deserves. It requires great technical firepower to reimagine the new experience and workflow infrastructure.” Shah said. “Indigo’s proprietary AI models do just that – solving new and existing problems that were previously impossible. In service of a more modern, transparent experience, we’re confident this is where we should be doubling down.” Introducing Indigo’s Home CheckoutIndigo is the first home transaction platform to unify home listings and offer making into one simple collaborative experience. Indigo helps listing agents get the terms sellers want via listing Storefronts that communicate critical seller preferences, drive demand, and collect & validate all offers. Indigo helps buyers’ agents write compliant offers and agency contracts in seconds – from any device – with its Contracts AI-powered writing and validation. This gives buyers and sellers unprecedented transparency into seller desires, market demand and negotiations. “As the real estate industry rapidly evolves, the demand for accurate, timely market data has become essential. Agents and clients now depend on data-driven insights to navigate the complexities of transactions and make informed decisions. Indigo offers a cutting-edge platform that leverages AI to provide these crucial insights, positioning itself as a game changer in the industry,” said Kourosh Sharifi, CFO of RE/MAX Executive. Indigo was founded by veteran entrepreneurs, Shaival Shah, Wei Gan, Paul Kim and Frances Bryant, bringing together proven track records in building and operating national real estate technology brands. Shaival and Wei previously founded Ribbon, a pioneering cash offers platform with 100,000+ agents, and $20B/yr in home offers. Paul was Chief Architect at Ribbon, and spearheads development of artificial intelligence and architecture for Indigo. Frances was Head of Real Estate at Ribbon, and leads real estate and operations at Indigo. www.useindigo.com SOURCE Indigo