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Moderate House Price Increases Expected as Market Adjusts to High Rates

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Veros Real Estate Solutions (Veros®), an industry leader in enterprise risk management and collateral valuation services, released its 2024 Q1 VeroFORECASTSM, with projections indicating an average nationwide appreciation of 2.9% over the next 12 months. This is an upward revision from last quarter’s forecast of 2.4%. VeroFORECASTSM evaluates home prices in over three hundred of the nation’s largest housing markets, and Veros is committed to the data science of predicting home value based on rigorous analysis of the fundamentals and interrelationships of numerous economic, housing, and geographic variables pertaining to home value. The prediction of a 2.9% increase in home prices over the next year comes amid a backdrop of low housing inventory and resilient demand despite elevated mortgage rates. Rates are expected to hover above 6.5% throughout 2024 due to inflation exceeding the Federal Reserve’s 2% target and a strong labor market, although displaying some signs of softening. Even with the high prices and mortgage rates, overall house prices are still trending up, driven by competition among homebuyers in the face of scarce listings. Further, millennials, the nation’s largest demographic, are stepping into their prime home-buying years, further amplifying demand. Though current mortgage rates exceed those of 2020-2021, they remain moderate in contrast to the daunting rates of the 1980s and 1990s. Looking ahead, the constrained housing supply will be influenced not only by financial factors but also by personal ties to homes and demographic shifts, such as Baby Boomers opting to age in place. Stringent lending regulations, a departure from the lax practices of the 2008 crisis, mitigate the risk of widespread defaults, ensuring market stability. The confluence of already high home prices and interest rates poses a formidable challenge for many buyers, particularly first-time homebuyers, underscoring affordability as a pivotal concern in the 2024 housing landscape. Consequently, buyers are gravitating towards smaller metros in the Northeast and Midwest, drawn by a blend of affordability, robust job markets, and lifestyle allure. The 10 strongest performing markets, poised for appreciation between 6%-7.5% over the next 12 months, predominantly hail from the Northeast and Midwest, boasting proximity to major metros and burgeoning opportunities catalyzed by the work-from-home trend. These include three in Pennsylvania -Lancaster, Reading, and Harrisburg; one in upstate New York – Rochester; two in New England – Manchester, NH; and Hartford, CT; and the remaining four in the Midwest – Rockford, IL; Grand Rapids, MI; Topeka, KS; and Indianapolis, IN. Rank Metropolitan Statistical Area Forecast 1 LANCASTER, PA 7.5% 2 ROCHESTER, NY 7.0% 3 MANCHESTER-NASHUA, NH 6.9% 4 READING, PA 6.7% 5 HARTFORD-EAST HARTFORD-MIDDLETOWN, CT 6.6% 6 ROCKFORD, IL 6.5% 7 GRAND RAPIDS-KENTWOOD, MI 6.2% 8 TOPEKA, KS 6.1% 9 INDIANAPOLIS-CARMEL-ANDERSON, IN 6.1% 10 HARRISBURG-CARLISLE, PA 6.0% Conversely, the ten weakest markets anticipate a mild depreciation over the next 12 months, ranging from -1% to -3%, with several metros, such as some of those in Texas, Louisiana, and Kentucky, grappling with elevated unemployment rates and failing to attract new residents. Previously bustling markets like Austin are experiencing a slowdown due to shifting economic dynamics related to affordability challenges and a less competitive job market. The interplay of supply, demand, and economic factors continues to shape the housing market narrative, underscoring the importance of localized insights amidst broader trends. Rank Metropolitan Statistical Area Forecast 1 BROWNSVILLE-HARLINGEN, TX -3.2% 2 LAKE CHARLES, LA -2.5% 3 AUSTIN-ROUND ROCK-GEORGETOWN, TX -2.4% 4 ST. GEORGE, UT -2.1% 5 PUEBLO, CO -2.0% 6 WACO, TX -1.7% 7 PUNTA GORDA, FL -1.7% 8 BOWLING GREEN, KY -1.6% 9 BEAUMONT-PORT ARTHUR, TX -1.6% 10 MYRTLE BEACH-CONWAY-NORTH MYRTLE BEACH, SC-NC -1.4% Contacts Heather Zeller, Vice President of MarketingCommunications@veros.com(714) 415-6300

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Low inventory is keeping competition high and home values rising The U.S. has a record-high 550 “million-dollar” cities — cities where the typical home is worth $1 million or more — a new Zillow® analysis shows. That is 59 more million-dollar cities than a year ago, reversing losses from when home values were wobbling this time last year. A tight housing market with few homes available has kept home values rising, even while affordability challenges have hampered buyers. The good news for buyers in the market this home-shopping season is that new listings are on the rise as the effects of “rate lock” — occurring when homeowners are financially incentivized to keep their current home because of the low rate on their current mortgage — are weakening, and the hope for lower mortgage rates later this year may mean a second wave of buyer demand this summer. “Affordability is still a big challenge for buyers, but that hasn’t stopped prices from growing,” said Anushna Prakash, an economic research data scientist at Zillow. “Buyers this spring are going to see more options to choose from, but they’ll also see a lot of other buyers wandering through the same open houses. Competition will stay fierce, especially for the most attractive and well-priced homes. If mortgage rates drop later this year, as many expect, we may see a surge in million-dollar cities as even more buyers jump in and drive prices higher.” While million-dollar cities were affected more than the typical U.S. city when home values fell in late 2022, they have generally tracked with the national market over the past year. The typical U.S. home is worth 4.2% more than it was a year ago. In current million-dollar cities, the median year-over-year home value growth is 4.6%. California is home to 210 million-dollar cities, more than the next five states combined. New Jersey has added the most million-dollar cities over the past year, gaining 14. Florida, Texas and Delaware are the only states to have a net loss in million-dollar cities over the past year. Florida lost three million-dollar cities — Siesta Key, Santa Rosa Beach and Sanibel — while adding one, the Village of Palmetto Bay, near Miami. Texas lost two million-dollar cities in the Austin area, Sunset Valley and Volente, and added Bellaire, outside of Houston. The typical home in Delaware’s Dewey Beach fell below the million-dollar cutoff. The New York City metro area, which includes parts of New Jersey and Pennsylvania, has the most million-dollar cities with 106 — 24 more than a year ago. San Francisco is next with 69, followed by Los Angeles with 63. Other than the New York City metro area, Los Angeles gained the most million-dollar cities over the past year, adding seven. Boston added four during that time, and San Diego, Chicago and San Luis Obispo each added three. Million-Dollar Cities by State State $1 Million Cities – February 2024 $1 Million Cities – February 2023 California 210 198 New York 66 54 New Jersey 49 35 Florida 32 34 Massachusetts 31 27 Colorado 21 21 Washington 18 16 Hawaii 17 16 Texas 14 15 Maryland 10 8 Virginia 7 5 South Carolina 6 6 Connecticut 6 5 Minnesota, Utah 6 4 Illinois 6 3 Missouri 5 5 Nevada, North Carolina, Wyoming 4 4 Montana 4 3 Arizona 4 2 Idaho, Tennessee 3 3 New Hampshire 3 2 Ohio 2 2 Pennsylvania 2 0 Delaware 1 2 Georgia, Kansas, Maine, Michigan, Rhode Island, Wisconsin 1 1 Metro Areas With the Most Million-Dollar Cities Metro Area $1 Million Cities– February 2024 $1 Million Cities– February 2023 New York, NY 106 82 San Francisco, CA 69 69 Los Angeles, CA 63 56 Boston, MA 23 19 San Jose, CA 18 18 Seattle, WA 17 15 Miami–Fort Lauderdale, FL 17 16 Washington, DC 14 12 San Diego, CA 10 7 Santa Maria–Santa Barbara, CA; Santa Rosa, CA 9 9 SOURCE Zillow

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Redfin reports over one-third of home purchases in February were made in all cash—not far from the record high The median down payment for U.S. homebuyers was $55,640 in February, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. That’s up 24.1% from $44,850 a year earlier—the largest annual increase in percentage terms since April 2022. The typical homebuyer’s down payment last month was equal to 15% of the purchase price, up from 10% a year earlier. This is based on a Redfin analysis of county records across 40 of the most populous U.S. metropolitan areas going back through 2011. “Homebuyers are doing whatever they can to pull together a large down payment in order to lower their monthly payments moving forward,” said Rachel Riva, a Redfin real estate agent in Miami. “The smallest down payment I’ve seen recently is 25%. I had one client who put down 40%.” Home prices rose 6.6% year over year in February, which is part of the reason down payments increased; a higher home price naturally leads to a higher down payment because the down payment is a percentage of the home price. But elevated housing costs (from both high prices and high mortgage rates) are also incentivizing buyers to take out larger down payments. A bigger down payment means a smaller total loan amount, and a smaller loan amount means smaller monthly interest payments. For example, a buyer who purchases today’s median-priced U.S. home ($374,500) and puts 15% down would have a monthly payment of $2,836 at the current 6.79% mortgage rate. A buyer who puts 10% down on that same home with that same rate would have a monthly payment of $2,968. That’s $132 more per month, which adds up over the course of a mortgage. Mortgage rates are down from their October peak of roughly 8%, but are still more than double the all-time low hit during the pandemic. Over 1 in 3 Home Purchases Are Made With Cash—a Near Record Share Over one-third (34.5%) of U.S. home purchases in February were made with all cash, up from 33.4% a year earlier. That’s just shy of the 34.8% decade-high hit in November, and isn’t far below the record high of 38% hit in 2013. Redfin defines an all-cash purchase as a home purchase with no mortgage loan information on the deed. Some homebuyers are paying in cash for the same reason others are taking out large down payments: elevated mortgage interest rates. While a large down payment helps ease the sting of high rates by reducing monthly interest payments, an all-cash purchase removes the sting altogether because it means a buyer isn’t paying interest at all. Most buyers, though, can’t afford to pay in cash, and many can’t afford a big down payment either. First-time buyers, especially, are at a disadvantage in today’s market. That’s because they don’t have equity from the sale of a previous home to bolster their down payments, and are often competing against all-cash offers, which sellers tend to favor. Many all-cash offers come from investors, who were buying up more than one-quarter of the country’s low-priced homes as of the end of last year. Overall, though, investors are purchasing far fewer homes than they were during the pandemic housing boom. “High mortgage rates are widening the wealth gap between people of different races, generations and income levels,” said Redfin Economics Research Lead Chen Zhao. “They’ve added fuel to the fire lit by surging home prices during the pandemic, creating a reality where in many places, wealthy Americans are the only ones who can afford to buy homes. Meanwhile, people who are priced out of homeownership are missing out on a major wealth building opportunity, which could have financial implications for their children and even their children’s children.” FHA Loans More Popular Than They Were During Pandemic Because the Market Is Less Competitive Roughly one in six (15.5%) mortgaged U.S. home sales used an FHA loan in February, up from 14.9% a year earlier and just shy of the 16.3% four-year high hit a month earlier. FHA loans are more common than they were during the pandemic homebuying boom (they represented 12.1% of mortgaged sales in February 2022) because the market today is less competitive. Roughly one in 14 (7%) mortgaged home sales used a VA loan in February, down from 8% a year earlier. The share of home sales using a VA loan typically doesn’t change much over time, though it fluctuated more than usual during the topsy-turvy pandemic market. Conventional loans are the most common type, representing over three-quarters (77.5%) of mortgaged home sales in February, up slightly from 77.1% a year earlier. Jumbo loans—used for higher loan amounts and popular among luxury buyers—represented 5.3% of mortgaged sales, compared with 4.7% a year earlier. Metros with biggest increases/decreases in down payment amounts In Las Vegas, the median down payment jumped 60.9% year over year—the largest increase among the metros Redfin analyzed. Next came San Diego (49.8%), Charlotte, NC (47.4%), Virginia Beach, VA (45%) and Newark, NJ (32.2%). Down payments only fell in two metros: Milwaukee (-13.9%) and Pittsburgh (-0.4%). Metros with highest/lowest down payment percentages In San Francisco, the median down payment was equal to 25% of the purchase price—the highest among the metros Redfin analyzed. It was followed by San Jose, CA (24.9%) and Anaheim, CA (21.9%). The following metros all had median down payments of 20%: Fort Lauderdale, FL, Los Angeles, Miami, Montgomery County, PA, New Brunswick, NJ, New York, Oakland, CA, Sacramento, CA, San Diego, Seattle and West Palm Beach, FL. Down payment percentages were lowest in Virginia Beach (1.8%), Detroit (5%), Pittsburgh (5%), Baltimore (5%) and Philadelphia (7.3%). While the Bay Area has among the most expensive home prices, it also has a high concentration of wealthy residents, many of whom can afford large down payments. Meanwhile, Virginia Beach is at the bottom of the list because it has a high concentration of veterans, many of whom take

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Major Home-Ownership Expenses Require Smaller Portion of Wages for Second-Straight Quarter; Historical Affordability Also Inches Upward; But Both Measures Remain Near Worst Levels in 15 Years as Home Prices Stay Close to All-Time Highs ATTOM, a leading curator of land, property, and real estate data, released its first-quarter 2024 U.S. Home Affordability Report showing that median-priced single-family homes and condos remain less affordable in the first quarter of 2024 compared to historical averages in more than 95 percent of counties around the nation with enough data to analyze. The latest trend continues a pattern, dating back to 2022, of home ownership requiring historically large portions of wages around the country. The report also shows that major expenses on median-priced homes consume 32.3 percent of the average national wage in the first quarter, several points above common lending guidelines. Both measures represent slight quarterly improvements but remain worse than a year ago and still sit at levels that have worked against home buyers for three years. That scenario has continued as increases in home values and major home-ownership expenses have outpaced gains in wages, despite a small respite from the second half of last year into the first quarter of 2024. As a result, the portion of average wages nationwide required for typical mortgage payments, property taxes and insurance remains up almost three percentage points from a year ago and 11 points from early in 2021, right before home-mortgage rates began shooting up from their lowest levels in decades. The latest expense-to-wage ratio continues to sit above the 28 percent level preferred by mortgage lenders and marks one the highest points over the past decade. “The picture for home buyers is brightening a little again as affordability measures have improved for the second quarter in a row,” said Rob Barber, CEO for ATTOM. “For sure, it’s not like things are coming up roses for house hunters. Affording a home remains a financial stretch, or a pipe dream, for so many households. But with mortgage rates coming down and home prices growing only by modest amounts, it’s gotten a bit easier for average wage earners to afford a home so far this year. The upcoming Spring buying season will say a lot about whether home prices remain stable enough for this trend to continue.” The first-quarter patterns come as the national median home price has risen less than 2 percent this quarter from the previous quarter and is still down from peaks hit last year. Further aiding buyers are mortgage rates that have dipped back down below 7 percent for a 30-year fixed loan after rising close to 8 percent in 2023. Inflation, while still running close to 4 percent, is less than half the levels hit in 2021. Those factors have helped reduce home ownership expenses following a period when they were shooting up faster than wages. The report determined affordability for average wage earners by calculating the amount of income needed to meet major monthly home ownership expenses — including mortgage payments, property taxes and insurance — on a median-priced single-family home, assuming a 20 percent down payment and a 28 percent maximum “front-end” debt-to-income ratio. That required income was then compared to annualized average weekly wage data from the U.S. Bureau of Labor Statistics. Compared to historical levels, median home ownership costs in 577 of the 590 counties analyzed in the first quarter of 2024 are less affordable than in the past. That number is down slightly from 584 of the same counties in the fourth quarter of last year but up from 549 in the first quarter of last year, and more than 10 times the figure from early 2021. Meanwhile, the portion of average local wages consumed by major home-ownership expenses on typical homes is considered unaffordable during the first quarter of 2024 in 425, or 72 percent, of the 590 counties in the report, based on the 28 percent guideline. Counties with the largest populations that are unaffordable in the first quarter are Los Angeles County, CA; Maricopa County (Phoenix), AZ; San Diego County, CA; Orange County, CA (outside Los Angeles) and Miami-Dade County, FL. The most populous of the 165 counties where major expenses on median-priced homes are still affordable for average local workers in the first quarter of 2024 are Cook County (Chicago), IL; Harris County (Houston), TX; Wayne County (Detroit), MI; Philadelphia County, PA, and Oakland County, MI (outside Detroit). View Q1 2024 U.S. Home Affordability Heat Map National median home price up quarterly but still down annually, with declines throughout nation The national median price for single-family homes and condos has grown to $336,250 in the first quarter of 2024, just $9,000 less than the all-time high of $345,000 hit several times in the past two years. The latest figure is up 1.9 percent from $330,000 in the fourth quarter of 2023 and up 5.1 percent from $319,900 in the first quarter of last year. Data was analyzed for counties with a population of at least 100,000 and at least 50 single-family home and condo sales in the first quarter of 2024. Among the 46 counties in the report with a population of at least 1 million, the biggest year-over-year increases in median prices during the first quarter of 2024 are in Orange County, CA (outside Los Angeles) (up 14.6 percent); Santa Clara County (San Jose), CA (up 10.3 percent); Palm Beach County (West Palm Beach), FL (up 9.9 percent); Nassau County, NY (outside New York City) (up 8.9 percent) and Miami-Dade County, FL (up 8.7 percent). Counties with a population of at least 1 million where median prices remain down the most from the first quarter of 2023 to the same period this year are Travis County (Austin), TX (down 8.1 percent); New York County (Manhattan), NY (down 7.9 percent); Bexar County (San Antonio), TX (down 3.8 percent); Tarrant County (Forth Worth), TX (down 3.2 percent) and Alameda County (Oakland), CA (down 2.5 percent). Prices growing faster than wages in half the U.S. With home values mostly up annually throughout the U.S., year-over-year price changes are outpacing changes in weekly annualized wages during the early months of 2024 in 358, or 60.7 percent, of the counties analyzed in the report. The current group of counties where prices are increasing more than wages annually, or decreasing

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Appoints Chad Henry as Regional Operations Director MCS, the national property services company founded in 1986, announced the opening of its latest self-performing Service Center in Memphis, TN, serving Tennessee and the surrounding areas. This announcement represents the latest addition to the company’s growing network of self-performing capabilities supporting all facets of the default mortgage, property preservation, commercial and residential rental segments. MCS now has “boots-on-the-ground” representation in 25 markets across the country, plus an extensive network of 30,000 third-party service partners to address property maintenance requests for its growing client base. The new Tennessee Service Center provides field services for MCS’s regional Single-Family Rental (SFR) clients as well as its Commercial and Mortgage business lines, and plans to provide tenant turn and maintenance for the local multifamily sector. The center is based in Memphis but serves the surrounding areas east to Nashville and west to Little Rock, AR with plans to continue expanding its coverage area throughout the region. MCS also announced that Chad Henry has been appointed the Tennessee Market Operations Director to oversee the new location. Henry brings over 20 years of construction industry experience to his new role with MCS, including owning his own construction business in the Memphis area for the last seven years as well as previously owning a construction company in Jackson, TN. He has been in the SFR business for several years and has a strong background in residential construction, including framing, electrical, plumbing, roofing, flooring, painting, drywall and landscaping. “We’re excited to add the Tennessee Service Center to the MCS roster of self-performing markets,” said Andrew Nolan, President, Commercial and Residential Services, for MCS. “Our hybrid service approach leverages the MCS internal expertise and talent with the local know-how of qualified vendors to create a uniquely efficient business model for our residential, property preservation and commercial clients.” The continued client demand for MCS self-performing capabilities and the overall growth of the Tennessee market was the driving force behind the company’s expansion plans. Tennessee was recently named one of the best states to do business and was ranked as the top state for small business job growth. The area is also one of the leading logistics hubs both globally and regionally, and has seen a major increase in millennial population over the last few years. “Tennessee offers a pro-business regulatory environment with low taxes and business costs, as well as a cost of living below the national average,” added Henry. “I’m thrilled to head up the new Tennessee Service Center and look forward to expanding operations, adding team members and working with local third-party service partners to support our clients.” About MCS MCS is a leading property services provider working across Commercial Properties, Single-Family Rentals, and the Property Preservation industry. For nearly 40 years, MCS has been committed to responsive care, industry-leading service standards, leveraging technology, and end-to-end transparency to protect, preserve and serve communities across the country. Some of the largest and most respected mortgage servicers, real estate owners and operators, and corporations trust MCS to perform property inspections, preservation, maintenance, renovations and other property-related services. Learn how MCS is Making Communities Shine at MCS360.com. Media Contact:Great Ink Communications212.741.2977MCS@greatink.com