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Unaffordability Expected to Remain Primary Constraint on Home Sales

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Rise in Listings Likely Means Many Homeowners No Longer Willing to Delay Moving Affordability constraints continue to limit the number of buyers willing and able to make home purchases, even as listings of for-sale homes rise, according to the June 2024 commentary from the Fannie Mae (OTCQB: FNMA) Economic and Strategic Research (ESR) Group. As such, the ESR Group downgraded its total home sales forecast to 4.82 million in 2024, representing a modest 1.3 percent annual gain compared to the previously projected 2.8 percent. Home sales have remained weaker than expected despite the recent rise in listings, which may indicate that many homeowners are no longer willing to delay moving due to the so-called “lock-in effect” – perhaps in part due to a general upward recalibration in mortgage rate expectations by consumers following the historically low mortgage rates of the pandemic. While the number of homes available for sale remains tight by historical standards, the months’ supply of inventory is gradually increasing, a dynamic the ESR Group sees as consistent with a deceleration in home price growth. The ESR Group also downgraded its 2024 real gross domestic product (GDP) growth outlook to 1.6 percent on a Q4/Q4 basis due to downward revisions to Q1 2024 GDP data, as well as recent data showing slowing income and spending growth. While recent inflation prints have been encouraging, the ESR Group expects the Federal Reserve will likely need to see several consecutive cool reports to gain confidence that inflation is returning sustainably to its 2-percent target. Given ongoing resilience in nonfarm payroll growth and volatility in inflation readings, the ESR Group now believes the Fed will cut rates only once this year, in December, as opposed to the previously projected two rate cuts. “The economy appears to be slowing, and recent readings offer hope that inflation is cooling after progress on that front stalled in the first quarter – a trend that will likely need to be sustained for the Fed to feel comfortable cutting rates,” said Doug Duncan, Fannie Mae Senior Vice President and Chief Economist. “Additionally, the labor market is showing signs of a gradual slowdown, with the unemployment rate creeping up to 4 percent in the June report. Unfortunately, we’re still not forecasting a ramp-up in housing activity, which will require some combination of continued household income growth, a further slowing of home price appreciation, or a decline in mortgage rates to bring affordability within range of many waiting first-time and move-up homebuyers.” Visit the Economic & Strategic Research site at fanniemae.com to read the full June 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. SOURCE Fannie Mae

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Statement from RealPage: The Real Story

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Company Addresses False Narrative Concerning Revenue Management Software RealPage, a leading global provider of software and data analytics to the real estate industry, issued a statement to correct factual inaccuracies that have been reported related to its revenue management software and its impact on renters. Starting in October 2022, false and misleading claims about RealPage and its revenue management software have been reported to the media and in legal filings. These factual inaccuracies threaten to undermine the essential benefits RealPage’s solutions provide to both renters and housing providers. In fact, RealPage’s revenue management software contributes to a healthier and more efficient rental housing ecosystem. “The time is now to address a number of false claims about RealPage’s revenue management software, and how rental housing providers operate when setting rent prices,” said Dana Jones, RealPage CEO and President. “Housing affordability should be the real focus. RealPage is proud of the role our customers play in providing safe and affordable housing to millions of people. Despite the noise, we will continue to innovate with confidence and make sure our solutions continue to benefit residents and housing providers, alike.” Housing affordability is the real problem Housing affordability, including the lack of affordable rental housing, is a critically important national problem created by a host of complex economic and political forces, including: Setting the record straight Here are the facts about RealPage’s revenue management software solutions: RealPage revenue management software offers prospective residents and housing providers more options and flexibility in lease terms, aids compliance with Fair Housing laws, does not use any personal or demographic data to generate rent price recommendations, and helps ensure that prospective residents have access to the best pricing available to everyone. RealPage has developed a resource center to educate stakeholders on the facts. Read more here: https://www.realpagepublicpolicy.com Contacts Jennifer Bowcock, SVP Communications & Creative for RealPage, Inc.jennifer.bowcock@realpage.com / 408-768-8221

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THE NAR SETTLEMENT

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The Institutional Impact on Shifting Agent Compensation There has been a lot of buzz in the industry about the NAR settlement and how it will impact all parties, from agents to consumers. But there hasn’t been much discussion about how it will affect institutions. Lenders, servicers, and investors should begin proactively adapting to the changes in agent compensation. Join us on June 24th, for a deep dive into The NAR Settlement & the Institutional Impact on Shifting Agent Compensation. This session will provide practical insights, helping you to prepare for and mitigate risks in your operations. Reserve your spot here – you won’t want to miss it.

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Homes Sales Fell to One of the Lowest Levels on Record in May

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The median U.S. home sale price hit a record high in May as demand continued to outpace supply, with the number of homes for sale roughly 25% below pre-pandemic levels Home sales fell 1.7% month over month in May on a seasonally adjusted basis and dropped 2.9% from a year earlier, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. There have been just two months in the past decade with fewer home sales: October 2023, when mortgage rates jumped to a 23-year high, and May 2020, when the onset of the pandemic brought the housing market to a halt and home sales to a record low. “Buyers today are facing many of the realities of a hot market even though few homes are changing hands,” said Redfin Senior Economist Elijah de la Campa. “Sales are sluggish because high homebuying costs are making both house hunters and prospective sellers skittish. And with so few homes for sale, buyers in some markets are getting into bidding wars, which is helping push home prices to record highs.” Sales may pick up later this year if mortgage rates slowly tick down as expected. May 2024 Highlights: United States   May 2024 Month-over-month change Year-over-year change Median sale price $439,716 1.6% 5.1% Homes sold, seasonally adjusted 407,959 -1.7% -2.9% New listings, seasonally adjusted 527,785 0.3% 8.8% All homes for sale, seasonally adjusted (active listings) 1,634,420 0.4% 11.1% Months of supply 2.3 -0.1 0.4 Median days on market 32 -3 0 Share of for-sale homes with a price drop 19.2% 2.4 ppts 6 ppts Share of homes sold above final list price 35.0% 1.4 ppts -2.4 ppts Average sale-to-final-list-price ratio 99.9% 0.2 ppts -0.1 ppts Average 30-year fixed mortgage rate 7.06% 0.07 ppts 0.63 ppts Home Prices Hit Another Record High in May, and Mortgage Rates Kept Climbing The median home sale price rose 5.1% year over year in May to a record $439,716. The average 30-year-fixed mortgage rate hit 7.06%. That’s up from 6.99% one month earlier and 6.43% one year earlier, and is more than double the all-time low of 2.68% during the pandemic. Daily average mortgage rates did drop to their lowest level in about three months this week after the latest CPI report showed that inflation is continuing to cool. Even though homes are selling for more than ever before, many sellers are still having to lower their list prices after putting their homes on the market—one silver lining for buyers. Nearly One of Every Five Homes for Sale Faced a Price Cut Nearly one in five (19.2%) homes for sale in May had a price cut, up from 13.2% a year earlier and just shy of the 21.7% record high set in October 2022. Some sellers are reducing their prices because they listed their home for too much initially and it ended up sitting on the market. The typical home for sale in May spent 32 days on the market. While that’s comparable with a year earlier, it’s the highest level for any May since the start of the pandemic. Price drops are particularly common in areas where housing supply has been rising quickly, like Florida and Texas. In these areas, individual home sellers have been facing strong competition from homebuilders. The Housing Shortage Is Improving, But Remains Severe New listings rose 0.3% month over month in May on a seasonally adjusted basis and climbed 8.8% from a year earlier. Still, they were roughly 20% below pre-pandemic (May 2019) levels. That’s largely because many homeowners don’t want to sell, as they feel “locked in” by the low mortgage rate they scored during the pandemic. Active listings, or the total number of homes for sale, rose 0.4% month over month on a seasonally adjusted basis and jumped 11.1% from a year earlier—the largest annual gain since the start of 2023. Still, active listings were about 25% below pre-pandemic levels. While new listings represent the number of homes that were listed for sale during a given month, active listings represent the total number of homes that were for sale during a given month. That means that the latter metric includes homes that aren’t selling. One reason active listings have risen so much is that in some areas, homes are lingering on the market and getting stale. Active listings are also soaring along Florida’s southwest Gulf Coast. In North Port, they surged 51.1% year over year on an unadjusted basis—the largest increase in the nation. Next came Tampa (46%) and Cape Coral (45.1%). Those housing markets are cooling faster than anywhere else in the country amid a new-construction boom, intensifying natural disasters and soaring insurance costs, a separate Redfin report found. Meanwhile, many of the markets that are holding up best and seeing price increases—like Rochester, NY—are relatively affordable and have near-record-low supply. Metro-Level Highlights: May 2024 To view the full report, including charts, please visit: https://www.redfin.com/news/home-sales-fall-to-near-record-low

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Minimal Rent Growth Expected for U.S. Multifamily Market in 2024

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Rent performance varies by region, with national average expected to decelerate U.S. multifamily rent growth and occupancy have deteriorated since the 2022 peak, and the 2024 Multifamily Outlook from Yardi® Matrix anticipates further deceleration in the second half of this year. According to the new report, advertised multifamily rents are up 1.1 percent year-to-date, with year-over-year increases maintaining each month at around 0.6 percent. Analysts expect that advertised rent growth will be around 1.7 percent for the calendar year, far below the 24 percent gain recorded in 2021 and 2022. Regional performance varies. A strong labor market and economic growth are supporting steady rent growth in the Midwest and Northeast, but an influx of new supply is putting pressure on rents in the Sun Belt, states the report. Inbound new supply is expected to continue to impact rents nationwide. Up to 553,000 of 1.2 million units under construction are forecast to come online by the end of 2024. “Supply growth has climbed in recent years due to strong demand for units, rapid rent growth and an influx of development capital,” state Matrix analysts. Between 2021 and 2023, 1.3 million units came online, while in the first half of the 2010s decade only 858,000 units were delivered, according to Matrix tracking. Gain more insights in the latest U.S. Multifamily Outlook from Yardi Matrix. SOURCE Yardi

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RE/MAX NATIONAL HOUSING REPORT FOR MAY 2024

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Inventory Jumped 40%, Home Prices Increased 5%, Sales Exceed 2023 Pace In May, both inventory and new listings grew to levels not seen since the second half of 2022.  The number of homes for sale, as surveyed across 53 metro areas, also increased, rising 8.7% over April and 39.6% year over year. And for the third consecutive month, the number of new listings exceeded 2023 levels by double-digit percentages – 15.1% in May, 18.2% in April, and 17.6% in March. Fueled by the 22-month high in new listings, May home sales grew 10.9% over April and 0.7% over last May. Monthly home sales in 2024 have now exceeded the 2023 monthly sales totals for four of the five months. The Median Sale Price increased 2.4% over April to $435,000. That was 4.8% higher than May 2023. The close-to-list price ratio remained at the 100% level it reached in April following eight months at 99% or less. “More sellers are seeing the advantages of listing their homes now. They’re getting their asking price and enjoying the benefits of a relatively quick sale,” said Amy Lessinger, President of RE/MAX, LLC. “Growing inventory offers more options for homebuyers, too, and we’re seeing more sales activity as a result. Mortgage rates continue to impact the rhythm of the housing market. If inventory keeps bulking up and mortgage rates don’t change, prices may eventually start to soften.” Metro areas across the U.S. have seen a steady increase in sales prices. Cleveland, OH, while having one of the lowest median sales prices in the report at $245,000, also experienced the biggest year-over-year increase, jumping 18.9%. Linda LaFleur, Broker/Owner of RE/MAX Crossroads in Cleveland said, “The median sales price has increased due to tight inventory and that’s stoking buyer competition and driving prices higher. The situation will likely persist until the Cleveland market offers more affordable housing and more listings are available. An uptick in listings would certainly help balance the market.” Other metrics of note: Highlights and local market results for May include: New Listings In the 53 metro areas surveyed in May 2024, the number of newly listed homes was up 5.3% compared to April 2024 and up 15.1% compared to May 2023. The markets with the biggest year-over-year increase in new listings percentage were San Diego, CA at +31.0%, Phoenix, AZ at +30.1%, and Seattle, WA at +25.9%. The markets with the biggest decrease in year-over-year new listings percentage were Cleveland, OH at -14.5%, Coeur d’Alene at -4.7%, and Des Moines, IA at -2.1%.  New Listings:5 Markets with the Biggest YoY Increase Market May 2024New Listings May 2023New Listings Year-over-Year% Change San Diego, CA 3,548 2,709 +31.0 % Phoenix, AZ 9,117 7,007 +30.1 % Seattle, WA 6,455 5,126 +25.9 % Denver, CO 6,726 5,478 +22.8 % Atlanta, GA 12,275 9,998 +22.8 % Closed Transactions Of the 53 metro areas surveyed in May 2024, the overall number of home sales was up 10.9% compared to April 2024 and up 0.7% compared to May 2023. The markets with the biggest increase in year-over-year sales percentage were Coeur d’Alene, ID at +21.4%, Salt Lake City, UT at +19.9%, and Burlington, VT at +17.5%. The markets with the biggest decrease in year-over-year sales percentage were Bozeman, MT at -9.1%, New Orleans, LA at -8.7%, followed by a tie between Cleveland, OH and Phoenix, AZ at -8.3%. Closed Transactions:5 Markets with the Biggest YoY Increase Market May 2024Transactions May 2023Transactions Year-over-Year% Change Coeur d’Alene, ID 341 281 +21.4 % Salt Lake City, UT 1,334 1,113 +19.9 % Burlington, VT 208 177 +17.5 % Trenton, NJ 310 267 +16.1 % Minneapolis, MN 4,626 4,020 +15.1 % Median Sales Price – Median of 53 metro area pricesIn May 2024, the median of all 53 metro area sales prices was $435,000, up 2.4% compared to April 2024, and up 4.8% from May 2023. The markets with the biggest year-over-year increase in median sales price were Cleveland, OH at +18.9%, Los Angeles, CA at +12.1%, and New York, NY at +11.9%. The markets with the biggest year-over-year decrease in median sales price were a three-way tie between Birmingham, AL, Honolulu, HI, and San Antonio, TX at -1.6%. Median Sales Price:5 Markets with the Biggest YoY Increase Market May 2024Median Sales Price May 2023Median Sales Price Year-over-Year% Change Cleveland, OH $245,000 $206,000 +18.9 % Los Angeles, CA $970,000 $865,000 +12.1 % New York, NY $610,000 $545,000 +11.9 % Manchester, NH $501,700 $452,001 +11.0 % Seattle, WA $775,000 $700,000 +10.7 % Close-to-List Price Ratio – Average of 53 metro area pricesIn May 2024, the average close-to-list price ratio of all 53 metro areas in the report was 100%, the same as in both April 2024 and May 2023. The close-to-list price ratio is calculated by the average value of the sales price divided by the list price for each transaction. When the number is above 100%, the home closed for more than the list price. If it’s less than 100%, the home sold for less than the list price. The metro areas with the highest close-to-list price ratios were San Francisco, CA at 106%, Hartford, CT at 105%, and Trenton, NJ at 104%. The metro areas with the lowest close-to-list price ratio were Miami, FL at 94%, New Orleans, LA at 96%, and Tampa, FL at 97%. Close-to-List Price Ratio:5 Markets with the Highest Close-to-List Price Ratio Market May 2024Close-to-List PriceRatio May 2023Close-to-List PriceRatio Year-over-YearDifference* San Francisco, CA 105.6 % 104.0 % +1.6 pp Hartford, CT 105.0 % 104.9 % +0.1 pp Trenton, NJ 104.2 % 101.4 % +2.8 pp Manchester, NH 103.1 % 103.6 % -0.5 pp Boston, MA 102.4 % 101.9 % +0.5 pp Days on Market – Average of 53 metro areasThe average days on market for homes sold in May 2024 was 34, down one day compared to the average in April 2024, and up two days compared to May 2023. Days on market is the number of days between when a home is first listed in an MLS and a sales contract is signed. The highest days on market averages were in Fayetteville, AR at 71, Coeur d’Alene, ID at 66, and San Antonio, TX at 62. The metro areas with the lowest days on market were Washington, DC at 11, Baltimore, MD at 12, followed by a tie between Hartford, CT and Manchester, NH at 14. Days on Market:5 Markets with the Highest Days on Market Market May 2024Days on Market May 2023Days on Market Year-over-Year% Change Fayetteville, AR 71 77 -7.4 % Coeur d’Alene, ID 66 32 +105.6 % San Antonio, TX 62 54 +14.8 % Miami, FL 60 51 +19.0 % Bozeman, MT 58 36 +62.3 % Months’ Supply of Inventory – Average

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