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HOME EQUITY DOWN SLIGHTLY ACROSS U.S. DURING FOURTH QUARTER BUT REMAINS STRONG

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Equity-Rich Portion of Mortgaged Homes Decreases While Seriously Underwater Level Rises; Overall Equity for Homeowners Also Ticks Downward Amid Decline in Home Values; But Nearly 95 Percent of Mortgaged Homeowners Still Have Equity Built Up ATTOM, a leading curator of land, property, and real estate data, released its fourth-quarter 2023 U.S. Home Equity & Underwater Report, which shows that 46.1 percent of mortgaged residential properties in the United States were considered equity-rich in the fourth quarter, meaning that the combined estimated amount of loan balances secured by those properties was no more than half of their estimated market values. The portion of mortgaged homes that was equity-rich in the fourth quarter of 2023 decreased from 47.4 percent in the third quarter of 2023, marking the second straight quarterly decline. The latest figure also was down from 48 percent in the fourth quarter of 2022. At the same time, the report shows that the portion of mortgaged homes that were seriously underwater in the U.S. rose slightly in the last few months of 2023, from 2.5 percent to 2.6 percent of all residential mortgages. Seriously underwater mortgages are those with combined estimated balances of loans secured by properties that are at least 25 percent more than those properties’ estimated market values. “There are increasing signs suggesting that the extended period of prosperity in the U.S. housing market may be showing signs of easing,” said Rob Barber, CEO for ATTOM. “It’s not as if there are big warning signs flashing. Similar things were happening early last year before the market surged in the Spring. But the softening of equity follows a dip in resale profits last year for the first time in more than a decade as prices have stopped soaring through the roof. This year’s peak buying season will tell us a lot about whether things really have settled down long-term.” The fourth quarter price decline capped off a year when the median home price grew annually by just 2 percent, marking the weakest growth since 2012 when the U.S. housing market was just starting to recover from the aftermath of the Great Recession that hit in the late 2000s. Prices grew at only a modest pace in 2023 amid a mixed scenario of rising mortgage rates that offset upward pressure from a tight supply of homes for sale, strong employment and a rising investment market. The potential for more uneven equity trends remains in place as the housing market heads into its annual peak Spring and Summer buying season but faces elevated prices that remain a financial stretch for wide swaths of the potential buying public. Equity-rich share of mortgages drops in most states The portion of mortgages that were equity-rich decreased in 41 of the 50 U.S. states from the third quarter of 2023 to the fourth quarter of 2023, commonly by one to three percentage points. The biggest declines came in the Midwest and West regions, led by Missouri (portion of mortgages homes considered equity-rich decreased from 41.9 percent in the third quarter of 2023 to 37.3 percent in the fourth quarter of 2023), Minnesota (down from 39.5 percent to 35.9 percent), Michigan (down from 48.5 percent to 45.1 percent), Washington (down from 56.7 percent to 53.5 percent) and Utah (down from 56.8 percent to 53.7 percent). At the other end of the scale, equity-rich levels rose in just nine states from the third quarter to the fourth quarter of last year, with the largest improvements concentrated in the Northeast region. The biggest increases were in Vermont (up from 79.8 percent to 82.8 percent), West Virginia (up from 30.5 percent to 32 percent), Wyoming (up from 39.9 percent to 41.2 percent), New Jersey (up from 45.9 percent to 46.8 percent) and Connecticut (up from 41.5 percent to 42.4 percent). Seriously underwater mortgage levels up slightly in most states The portion of mortgaged homes considered seriously underwater rose nationwide from one in 40 during the third quarter of 2023 to one in 38 during the fourth quarter. The ratio went up in 42 states, mostly by less than one percentage point. The biggest increases were clustered in the Midwest and South, regions that already had some of the nation’s highest levels of seriously underwater mortgages. The largest quarterly increases were in Wyoming (share of mortgaged homes that were seriously underwater up from 5.9 percent in the third quarter of 2023 to 8.8 percent in the fourth quarter of 2023), Missouri (up from 3.9 percent to 5.6 percent), Oklahoma (up from 4.6 percent to 5.5 percent), North Dakota (up from 4.6 percent to 5.2 percent) and Illinois (up from 4.4 percent to 5.1 percent). On the flip side, states where the percentage of seriously underwater homes decreased the most from the third to the fourth quarter of last year were Idaho (down from 2.7 percent to 2.3 percent), California (down from 1.6 percent to 1.3 percent), West Virginia (down from 4.6 percent to 4.4 percent), Texas (down from 2.4 percent to 2.2 percent) and Vermont (down from 0.9 percent to 0.7 percent). Highest levels of equity-rich homeowners still in Northeast and West Nine of the 10 states with the highest levels of equity-rich mortgaged properties around the U.S. during the fourth quarter of 2023 were in the Northeast or West regions. Those with the largest portions were Vermont (82.8 percent of mortgaged homes were equity-rich), Maine (60 percent), California (58.2 percent), New Hampshire (58 percent) Idaho (57.6 percent). Nine of the 10 states with the lowest percentages of equity-rich properties during the fourth quarter of 2023 were in the Midwest or South. The smallest portions were in Louisiana (19.7 percent of mortgaged homes were equity-rich), Illinois (28 percent), Alaska (29.2 percent), Oklahoma (30 percent) and Maryland (30.2 percent). Among 107 metropolitan statistical areas around the nation with a population of at least 500,000, the West and South again dominated the list of places with the highest portion of mortgaged properties that were equity-rich. All but four of the top 25

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Redfin reports buyers can afford a more expensive home now that mortgage rates have dropped to 6.7%, down from nearly 8% in October A homebuyer on a $3,000 monthly budget has gained nearly $40,000 in purchasing power since mortgage rates peaked this past fall, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. A $3,000 monthly budget will buy a $453,000 home with a 6.7% mortgage rate, roughly this week’s average. That’s compared to the $416,000 home the same buyer could have purchased in October with an average rate of 7.8%. To look at affordability from another perspective, the monthly mortgage payment on the typical U.S. home, which costs roughly $363,000, is $2,545 with a 6.7% rate. The monthly payment was nearly $200 higher— $2,713— when rates were at 7.8%. Homebuyers are getting some relief in 2024 as mortgage rates come down from the two-decade high they hit this past October. Weekly average rates dipped into the 6.6% range by the end of 2023, and ticked up slightly to 6.7% this week. While that’s double the record-low 3% rates buyers scored during the pandemic, Redfin agents report that buyers have come to terms with the 6% range— but they were more hesitant when they were approaching 8%. “Bidding wars are picking up as mortgage rates decline and inventory stays low. I’ve seen a few homes get 15-plus offers recently, and one got more than 30,” said Shoshana Godwin, a Redfin Premier agent in Seattle. “Late last year, many listings sat on the market as buyers sat on the sidelines, hoping for rates to drop. Now, buyers are snapping up homes because even though rates haven’t plummeted, people are realizing that the longer they wait to buy a home, the more competition they’re likely to face.” Mortgage rates likely to stay in the 6’s for the foreseeable future Redfin economists predict mortgage rates will end the year lower than they started, but the path is likely to be bumpy. Redfin is keeping an eye on next week’s Fed meeting to provide more clues on how soon they will cut interest rates: It could be as soon as March, but it’s likely to be later. Mortgage rates should come down a little— but not a lot— when interest rates are cut. “My advice to serious house hunters: Trying to time the market around mortgage rates is probably a waste of energy, as affordability is unlikely to change meaningfully in the next several months,” said Redfin Chief Economist Daryl Fairweather. “Instead, buyers should consider their own personal and financial circumstances: What matters most is whether the home meets your needs long term and whether you can afford it. Timing the market mattered in 2021, when we were in a golden window of record-low rates— but that window is closed.” To view the full report please visit: https://www.redfin.com/news/purchasing-power-improves

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Redfin agents in areas affected by inclement weather report slow homebuying activity, but agents in warmer locales say buyers and sellers are active as mortgage rates stay in the high-6% range, down from 8% a few months ago The median U.S. home-sale price rose 5.1% during the four weeks ending January 21, the biggest increase since October 2022, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. Asking prices rose 6.5% which is also the biggest increase since October 2022. Prices are rising for a few reasons. One, inventory is still quite low. The total number of homes for sale is down 4% year over year. And while new listings are up 2%, that’s the smallest annual increase in two months. Additionally, sellers can command higher prices because buyers have more purchasing power; mortgage rates are holding steady in the mid-to-high 6% range, down from 8% in October. This week’s sales data shows sluggish activity as severe winter weather kept buyers and sellers on the sidelines in much of the country: Pending home sales are down 8% year over year, the biggest decline in four months. The big annual drop in pending sales can also be explained in part by a base effect from last January: Pending sales were improving at this time last year as mortgage rates fell. While Redfin agents in places that are facing harsh weather report that would-be buyers are staying home (for now), mortgage-purchase applications are rising, and agents in warmer places say demand is picking up: Leading indicators Indicators of homebuying demand and activity Value (if applicable) Recent change Year-over-year change Source Daily average 30-year fixed mortgage rate 6.95% (Jan. 24) Up slightly from a week earlier Up from 6.18% Mortgage News Daily Weekly average 30-year fixed mortgage rate 6.6% (week ending Jan. 18) Lowest level since May Up from 6.15% Freddie Mac Mortgage-purchase applications (seasonally adjusted) Up 8% from a week earlier; up 17% from a month earlier (as of week ending Jan. 19) Down 18% Mortgage Bankers Association Redfin Homebuyer Demand Index (seasonally adjusted) Down 8% from a month earlier (as of week ending Jan. 21) Down 21% Redfin Homebuyer Demand Index, a measure of requests for tours and other homebuying services from Redfin agents Google searches for “home for sale” Up 18% from a month earlier (as of Jan. 20) Down 15% Google Trends To view the full report, including charts, please visit:https://www.redfin.com/news/housing-market-update-prices-rise-pending-sales-fall

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Haddad Will Focus Association Efforts on Wholesale Channel Growth The Association of Independent Mortgage Experts (AIME), the leading membership organization representing the independent mortgage broker industry, announced the appointment of Jonathon Haddad as Chairman and Chief Executive Officer. Mr. Haddad is joining the AIME staff immediately as CEO and will assume the Chairman role on April 1, 2024, when current Chairman and CEO Katie Sweeney steps down to become the full-time CEO of the Broker Action Coalition (BAC). A 10-year mortgage veteran, Haddad successfully transitioned from the retail channel, formerly a Vice President at one of the largest retail lenders, and joined the broker channel in 2020. He brings a proven track record as a top originator and business owner as President of Next Door Lending, one of the nation’s top mortgage brokerages. As a current AIME member, he has also experienced the association from a member’s perspective and will leverage that insight as the organization’s leader. “I am honored to take on the role of CEO at AIME and have seen firsthand the strength and potential of the broker community,” said Jonathon Haddad. “My goal is to further enhance AIME’s commitment to supporting mortgage brokers and fostering their growth and success in the industry.” AIME will continue its dedication to membership support and development programs. This includes high-level loan escalations with AIME lender partners, broker education via AIME Academy, consumer education through brokersarebetter.com, wholesale networking opportunities, the annual Fuse national conference, and supporting the Broker Action Coalition’s (BAC) advocacy efforts for the broker channel. “I’ve been a leader at AIME since its inception and I value our community greatly,” adds Marc Summers, President of AIME. “We’re very proud of what we’ve accomplished in just the past few years, and we’re excited to build on that momentum and continue our growth and together, we will work towards a future that’s bright for brokers.” Under Haddad’s leadership, AIME will introduce new initiatives, including a deeper focus on Retail to Wholesale originator recruitment, enhanced business support for the nation’s wholesale brokerages, and the implementation of pro-broker awareness within the community and external organizations. “I want to create an environment where brokers thrive, fostering growth and success for all participants in the wholesale channel,” added Haddad. “I’ve seen both sides of our industry, and I can wholeheartedly say that the future of mortgage is with independent brokers. I made the decision to put homebuyers first when I moved into the wholesale world, and now, I’m doubling down on my commitment to them and the entire broker community.” United Wholesale Mortgage (UWM), AIME’s title sponsor and the nation’s #1 mortgage lender, expresses their support for AIME and Haddad’s appointment. “It is no secret that UWM is 100% dedicated to the continued growth and success of the broker channel and supportive of anything and anyone that aligns with this focus,” states Mat Ishbia, President and CEO of UWM. “I look forward to seeing Jonathon build upon the strong foundation AIME has today and do great things to support the broker community and educate borrowers that the broker channel is the best choice for them.” AIME will continue supporting and working with the Broker Action Coalition (BAC) as it leads the wholesale channel’s advocacy efforts in Washington, D.C., for state and federal legislative reform. “Continuing to partner with AIME is crucial for advancing the interests of brokers, and we are focused on the positive impact this collaboration will have on our shared goals,” said Katie Sweeney, the newly announced CEO of BAC. “I firmly believe that together, we can achieve great things for our channel.” “AIME has always been an organization that thrives on innovation, something that aligns with our own mission to bring the broker channel into the 21st century through digital advancement,” said Eddy Perez, CMB, Founder and CEO of EPM. “ It’s exciting to see the organization’s growth since the beginning and we remain committed to our shared vision for the future of the channel.” AIME and its partners are aligned in their mission to support the broker community, empower homebuyers, and increase wholesale market share. Jonathon Haddad’s appointment marks a significant step forward in achieving these future objectives.

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Profits on Home Sales Across U.S. Decrease for First Time Since 2011;Typical Seller Gains Remain Strong, But Decline from 60 Percent to 57 Percent;National Median Home Price Rises at Slowest Pace in 12 Years ATTOM, a leading curator of land, property and real estate data, released its Year-End 2023 U.S. Home Sales Report, which shows that home sellers made a $121,000 profit on the typical sale in 2023, generating a 56.5 percent return on investment. But even as both gross profits and profit margins remained near record levels, they decreased from 2022, marking the first declines in either category since 2011. The gross profit on median-priced single-family homes sales dipped down from $122,600 in 2022 while the profit margin dropped, year over year, from 59.8 percent. That happened as the median nationwide home price rose at the smallest annual pace in more than a decade. The profit fallback came during a year of ups and downs for the U.S. housing market that featured flat prices early in 2023, followed by a spike in the Spring and a drop-off in the fourth quarter. Price patterns were mixed as the upward pressure of strong employment and investment markets, along with a historically tight supply of homes, competed with the downward force of home-mortgage rates that rose during most of 2023. “Last year certainly stood out as another very good year for home sellers across most of the United States. Typical profits of over $120,000 and margins close to 60 percent were still more than double where they stood just five years earlier,” said Rob Barber, CEO at ATTOM. “But the market definitely softened amid modest price gains that weren’t enough to push profits up higher after a long run of improvements. In 2024, the stage seems set for more small changes in prices as well as seller gains given the competing forces of interest rates that have headed back down in recent months and home supplies that remain tight, but home ownership costs that remain a serious financial burden for many households.” Among 129 metropolitan statistical areas with a population greater than 200,000 and sufficient sales data, sellers in western and southern states again reaped the highest returns on investment in 2023. The West and South regions had 12 of the 15 metro areas with the highest ROIs on typical home sales last year, led by San Jose, CA (99.4 percent return on investment); Knoxville, TN (98.1 percent); Seattle, WA (92.9 percent); Spokane, WA (90.6 percent) and Scranton, PA (89.6 percent). Historical U.S. Home Seller Gains National median home price rises at slowest pace since 2011The U.S. median home price increased 2.1 percent from 2022 to 2023, reaching another all-time annual high of $335,000. The typical 2023 price has more than double the nationwide median in 2011, a point in time right before the housing market began recovering from the aftereffects of the Great Recession that hit in the late 2000s. The 2023 increase, however, represented the smallest annual bump during the extended boom period that began in 2012. The full-year median home-price appreciation slowed down as interest rates rose in 2023 close to 8 percent for a 30-year mortgage. While gains were mostly small, median prices still rose from 2022 to 2023 in 97, or 75 percent of the 129 metropolitan statistical areas around the U.S. with a population of 200,000 or more and sufficient home price data last year. Those with the biggest year-over-year increases were Hilton Head, SC, (median up 12.2 percent); Naples, FL (up 10.6 percent); Hartford, CT (up 10.5 percent); Savannah, GA (up 10.5 percent) and Rochester, NY (up 9.7 percent). Aside from Hartford and Rochester, the largest median-price increases in metro areas with a population of at least 1 million in 2023 came in Miami, FL (up 8.6 percent); Cincinnati, OH (up 8.1 percent) and Milwaukee, WI (up 6.9 percent). Metro areas where median prices dropped most in 2023 were Austin, TX (down 6.2 percent); San Francisco, CA (down 4.4 percent); Stockton, CA (down 4.4 percent); Boise, ID (down 4.1 percent) and Phoenix, AZ (down 3.8 percent). Profit margins drop in two-thirds of nation, with worst declines in South or WestProfit margins on typical home sales decreased from 2022 to 2023 in 84 of the 129 metro areas with sufficient data to analyze (65 percent). That happened as the 2.3 percent jump in the median sale price nationwide in 2023 fell behind the typical 4.4 percent increase recent sellers had been paying when they originally bought their homes. The 40 largest decreases in investment returns were all in the South or West, led by Port St. Lucie, FL (ROI down from 104.5 in 2022 to 82.7 percent in 2023); Austin, TX (down from 67.2 percent to 46.2 percent); Phoenix, AZ (down from 79.3 percent to 60.6 percent); Reno, NV (down from 80.6 percent to 64.5 percent) and Salt Lake City, UT (down from 68.3 percent of 52.2 percent). Aside from Austin, Phoenix and Salt Lake City, the largest ROI losses from 2022 to 2023 in metro areas with a population of at least 1 million were in San Francisco, CA (ROI down from 92.7 percent to 79.5 percent) and Las Vegas, NV (down from 74.3 percent to 61.8 percent). The biggest increases in investment returns from 2022 to 2023 came in Scranton, PA (ROI up from 75.1 percent to 89.6 percent); South Bend, IN (up from 53.6 percent to 66.5 percent); Hartford, CT (up from 53.2 percent to 65.8 percent); Rockford, IL (up from 48.8 percent to 57.8 percent) and Rochester, NY (up from 53.8 percent to 62.8 percent). Aside from Hartford and Rochester, metro areas with a population of at least 1 million and increasing profit margins in 2023 included Cincinnati, OH (up from 54.8 percent to 61.2 percent); Cleveland, OH (up from 48 percent to 53.4 percent) and Milwaukee, WI (up from 52.9 percent to 57.2 percent). Gross profits still top $100,000 in more than half the country, with largest again clustered on West CoastDespite the small national decrease, gross profits on median-priced home sales in 2023 still topped $100,000 in 77, or 60 percent, of the 129 metro areas with sufficient data to analyze. The West region had 12 of the top 15 gross profits in 2023, led by San Jose, CA ($698,000); San Francisco, CA ($476,000); San Diego, CA ($354,000); Los Angeles, CA ($330,000) and Seattle, WA ($325,000). The 15 smallest gross profits in 2023 were in the South and Midwest, reflecting lower home prices in those areas than elsewhere. They were led by Peoria, IL ($35,500); Davenport, IA ($41,052); McAllen, TX ($46,167); Baton Rouge, LA ($47,600) and Toledo, OH ($49,800). Homeownership