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Builders continue shift to condos and townhomes amidst affordability crisis

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Markets with faster-rising home values have seen a greater surge in permitting, on average America’s housing stock continues to grow faster than it did before the pandemic-induced housing frenzy, as builders race to fill a shortage of 4.5 million homes. The latest analysis from Zillow® shows roughly 1 million single-family homes were completed in 2023, the second-highest annual total since before the global financial crisis. That’s about 11% more homes than were completed in 2019. To achieve this pace, builders pivoted toward higher density, building more townhomes as opposed to detached single-family homes — similar to what they did in 2022. Construction starts for detached single-family homes declined by nearly 9% from 2022 to 2023, but starts for attached single-family homes rose by more than 3% over the same time span. “The housing affordability crisis still grips America. It was precipitated by decades of underbuilding, and despite builders’ recent efforts, the unmet need for homes is growing,” said Orphe Divounguy, Zillow senior economist. “The best long-term solution is more supply. Builders are helping where they can by shifting to more cost-conscious and space-efficient designs. But promoting density through local laws is key — that will go a long way to bring in more affordable homes where they’re needed the most.” Focusing on attached homes allows builders to overcome some of the challenges related to land acquisition costs and also provide homes that are more affordable to cost-challenged buyers. They are building more units on smaller lots — the median size of a new home remained steady at around 2,200 square feet, while median lot area fell by 700 square feet, when compared to 2022. But the pace of construction is slowing, likely due in large part to slowing demand amid housing affordability challenges. Construction began on 946,000 single-family homes in 2023, about 7% fewer than in 2022 and 16.5% fewer than in 2021. This is a decline from a very strong couple of years; it still represents a solid number, historically speaking, 6% higher than 2019. Markets that have issued the most single-family permits since 2020 are Houston, Dallas and Phoenix. That is good news for housing affordability in these markets, which have already been stretched by population growth. Markets with faster jobs and income growth, and thus higher housing demand, have historically seen larger increases in new construction activity relative to lower growth markets. The Zillow analysis further illustrates this relationship – markets with higher increases in home values from 2020 through 2024 also tended to see higher permitting over the same period of time, on average. New construction has taken on more importance by providing options to buyers at a time when existing owners have pulled back from listing their homes. Home shoppers can find more new construction communities on Zillow than any other U.S. platform. Where the most single-family construction has been permitted since the pandemic Metro Area Single-family permits(Jan 2020—August 2024) Single-family home value change(Jan 2020—August 2024) Houston, TX 232,810 39 % Dallas, TX 207,471 47 % Phoenix, AZ 138,445 54 % Atlanta, GA 128,202 59 % Austin, TX 94,361 43 % Charlotte, NC 87,987 61 % Orlando, FL 76,355 55 % Tampa, FL 74,265 62 % Nashville, TN 70,850 50 % Jacksonville, FL 65,510 53 % SOURCE Zillow

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Home Price Growth Expected to Decelerate in 2025 as Affordability Remains Stretched Following annual revisions to the national accounts and an improvement in payroll employment growth in both August and September, the economy now appears to be on firmer footing than previously thought, according to the October 2024 commentary from the Fannie Mae (OTCQB: FNMA) Economic and Strategic Research (ESR) Group. While the ESR Group still expects economic growth to slow from the robust 3.2 percent pace recorded in 2023, the degree of expected slowing is smaller; growth in 2024 and 2025 is now expected to be 2.3 percent and 2.0 percent, respectively, near the long-run trend growth rate. The improved economic outlook stems in large part from significant upward revisions to recent personal income data. Previously, the ESR Group expected consumption growth to retrench, as it had grown unsustainably relative to incomes, but revised data now show the relationship between income and consumption to be closer to historical levels. As such, the ESR Group believes the economy can maintain growth closer to its long-run potential through its forecast horizon, barring an unforeseen shock to consumer or business confidence from an adverse exogenous event. Following data revisions and recent employment data, bond market expectations for rate cuts have moved into closer alignment with the dot plot from the Federal Reserve’s latest Summary of Economic Projections. As a result, the 10-year Treasury is currently up more than 40 basis points from its mid-September low. This represents upside risk to the ESR Group’s latest mortgage rate forecast, which now sees the 30-year mortgage rate ending the year at 6.0 percent, down from last month’s 6.2 percent projection, and to decline steadily to 5.7 percent by the end of 2025. Meanwhile, the ESR Group expects annual home prices to grow 5.8 percent in 2024 and 3.6 percent in 2025, both slight adjustments to their previous forecasts of 6.1 percent and 3.0 percent, respectively. While the general low level of homes available for sale is expected to continue to exert upward pressure on prices, the ESR Group expects ongoing affordability constraints and rising inventories of homes available for sale to help moderate the magnitude of home price growth moving forward. “While potential homebuyers have noticed the decline in mortgage rates over the last few months, they are equally aware that there has been little relief on the home price side, the other primary driver of unaffordability, particularly for first-time buyers,” said Mark Palim, Fannie Mae Senior Vice President and Chief Economist. “The timing of the long-expected pick-up in home sales activity, as well as a further moderation in home price appreciation, will depend in part on the willingness of current homeowners to relinquish their low mortgage rates by offering their homes for sale. Of course, continued strong homebuilding activity will also play a significant role as the shortage of national housing stock remains the primary impediment to affordability.” Visit the Economic and Strategic Research site at fanniemae.com to read the full October 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 and Strategic Research Group, please click here. SOURCE Fannie Mae

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2024 LexisNexis Home Trends Report highlights why home insurance has increased for homeowners as loss costs across all perils rise for the fifth year in a row LexisNexis® Risk Solutions released its ninth annual LexisNexis U.S. Home Trends Report, providing an updated view of by-peril trends in the U.S. home insurance industry to help insurers make more informed business decisions to be better positioned for profitable growth, and help them educate consumers on home insurance trends that impact their policies. In addition to insights into loss cost, frequency and severity, the report includes details about seasonality, distribution of catastrophe claims and geographic trends. Key Takeaways “In the last year, the U.S. saw several historic-level weather disaster events and the highest level of catastrophic claims across all perils we’ve seen in the past seven years, which contributes to rising premiums that consumers across the country face right now,” said Cole Winans, vice president, home insurance, LexisNexis Risk Solutions. “As home insurance carriers continue to contend with seasonal and geographic variabilities related to climate – in addition to rising inflation, material and labor costs – understanding by-peril and macro level home insurance trends coupled with maintaining extensive data and imagery on current house conditions over an extended period of time is imperative to remain nimble in today’s volatile and dynamic market. Even as more insurers are likely to see rate increases approved in certain states in the coming months, they will need to be discerning in writing new business only in those pockets where they can do so profitably and that will be on a carrier-by-carrier and state-by-state basis.” All Peril Trends A Year of Hail Wind, Water, Fire and Lightening Perils Non-Weather-Related Perils “When we look at peril data over a seven-year span, it’s increasingly clear that home insurers cannot rely on short-term trends alone to make fully informed decisions about their books of business and operational strategies,” said George Hosfield, associate vice president, home insurance, LexisNexis Risk Solutions. “For example, while hail loss cost surged by 57.9% in a one-year observance, the longer-term trend shows consistent increases across all perils year-over-year. This emphasizes the need for carriers to consider broader historical data when evaluating risk and adjusting pricing strategies to help support their long-term profitability.” Download the latest LexisNexis U.S. Home Trends Report. Media Contacts:Chas StrongLexisNexis Risk SolutionsPhone: +1.706.714.7083Charles.Strong@lexisnexisrisk.com SOURCE LexisNexis Risk Solutions

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Inventory Grows as Home Sales Cool, Prices Dip Slightly The number of homes for sale climbed for the seventh consecutive month across the 52 metro areas surveyed – 6.4% higher than August and 33.6% above September 2023 levels. New listings also increased 9.7% compared to September 2023. At the same time, September home sales cooled off 13.3% from August – a seasonal norm. Home sales dropped 13.8% and 9.7% from August to September in 2023 and 2022, respectively. Meanwhile, the median sales price dropped 1.4% from August to $429,000. Sales were 3.1% below a year ago while the sales price was 4.6% higher. Year to date, 2024 home sales have exceeded 2023 levels in five of nine months while September’s median sale price was higher year over year for the 15th consecutive month. “While we’re seeing a slight cooling in sales, it’s encouraging to note that home inventory has been steadily increasing, giving buyers more options in the market,” said RE/MAX, LLC President Amy Lessinger. “The consistency in sales prices and the fact that buyers are still paying 99% of asking price demonstrates the resiliency in today’s housing market. Lower rates could generate some increased activity as we end 2024 and start 2025.” The Atlanta market has seen incremental increases in active inventory since January – steadily rising 63% over the past eight months; however, RE/MAX Around Atlanta Broker/Owner Kristen Jones said, “While inventory has trended up, it is still very low and there simply is not enough inventory under half a million dollars. Sales are up in some price points – especially over $500,000 – but I think rates need to drop to really see some change.” Other metrics of note: Highlights and local market results for September include: New Listings In the 52 metro areas surveyed in September 2024, the number of newly listed homes was down 0.3% compared to August 2024, and up 9.7% compared to September 2023. The markets with the biggest increase in year-over-year new listings percentage were Bozeman, MT at +35.9%, Phoenix, AZ at +32.8%, and Las Vegas, NV at +27.5%. The markets with the biggest year-over-year decrease in new listings percentage were Tampa, FL at -12.3%, San Francisco, CA at -12.0%, and San Antonio, TX at -9.1%. New Listings:5 Markets with the Biggest YoY Increase Market Sep 2024 Sep 2023 Year-over-Year % Change Bozeman, MT 246 181 +35.9 % Phoenix, AZ 8,795 6,624 +32.8 % Las Vegas, NV 4,125 3,236 +27.5 % San Diego, CA 3,078 2,475 +24.4 % Urban Honolulu, HI 982 807 +21.7 % Closed Transactions Of the 52 metro areas surveyed in September 2024, the overall number of home sales was down 13.3% compared to August 2024, and down 3.1% compared to September 2023. The markets with the biggest decrease in year-over-year sales percentage were Tampa, FL at -21.9%, Omaha, NE at -16.2%, and Miami, FL at -16.1%. The markets with the biggest increase in year-over-year sales percentage were Coeur d’Alene, ID at +17.2%, Salt Lake City, UT at +9.5%, and Dover, DE at +7.8%. Closed Transactions:5 Markets with the Biggest YoY Decrease Market Sep 2024 Sep 2023 Year-over-Year % Change Tampa, FL 3,713 4,755 -21.9 % Omaha, NE 924 1,102 -16.2 % Miami, FL 5,029 5,997 -16.1 % Pittsburgh, PA 1,714 1,964 -12.7 % Des Moines, IA 784 894 -12.3 % Median Sales Price – Median of 52 metro area pricesIn September 2024, the median of all 52 metro area sales prices was $429,000, down 1.4% compared to August 2024, and up 4.6% from September 2023. The markets with the biggest year-over-year increase in median sales price were Hartford, CT at +11.9%, Cleveland, OH at +9.1%, and Providence, RI at +8.9%. The markets with the biggest year-over-year decrease in median sales price were Coeur d’Alene, ID at -4.7%, San Antonio, TX at -3.1%, and Tampa, FL at -2.6%. Median Sales Price:5 Markets with the Biggest YoY Increase Market Sep 2024 Sep 2023 Year-over-Year % Change Hartford, CT $375,000 $335,000 +11.9 % Cleveland, OH $239,950 $220,000 +9.1 % Providence, RI $479,000 $440,000 +8.9 % Richmond, VA $399,000 $368,000 +8.4 % Anchorage, AK $406,079 $375,000 +8.3 % Close-to-List Price Ratio – Average of 52 metro area pricesIn September 2024, the average close-to-list price ratio of all 52 metro areas in the report was 99%, the same as in both August 2024 and September 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 lowest close-to-list price ratio were Miami, FL at 94.1%, Bozeman, MT at 95.8% and Coeur d’Alene, ID at 97.0%. The metro areas with the highest close-to-list price ratio were Hartford, CT at 103.6%, San Francisco, CA at 103.5%, and Trenton, NJ at 102.3%. Close-to-List Price Ratio:5 Markets with the Lowest Close-to-List Price Ratio Market Sep 2024 Sep 2023 Year-over-Year Difference* Miami, FL 94.1 % 94.9 % -0.8 pp Bozeman, MT 95.8 % 97.1 % -1.3 pp Coeur d’Alene, ID 97.0 % 95.9 % +1.1 pp Tampa, FL 97.0 % 97.5 % -0.6 pp Houston, TX 97.1 % 97.3 % -0.3 pp *Difference displayed as change in percentage points Days on Market – Average of 52 metro areasThe average days on market for homes sold in September 2024 was 40, up two days compared to the average in August 2024, and up five days compared to September 2023. The metro areas with the lowest days on market were Baltimore, MD at 13, Washington D.C. at 14, and Trenton, NJ at 15. The highest days on market averages were in Coeur d’Alene, ID at 79, San Antonio, TX at 73, and Fayetteville, AR at 72. Days on market is the number of days between when a home is first listed in an MLS and a sales contract is signed. Days on Market:5 Markets with the Lowest Days on Market Market Sep 2024 Sep 2023 Year-over-Year % Change Baltimore, MD 13 12 +8.7 % Washington, DC 14 14 +6.4 % Trenton, NJ 15 13 +19.0 % Philadelphia, PA 16 15 +8.7 % Hartford, CT 17 30 -42.4 % Months’ Supply of Inventory – Average of 52 metro areasThe number of homes for sale in September 2024 was up 6.4% from August 2024 and up 33.6% from September 2023. Based on the rate of home sales in September 2024, the months’ supply of inventory was 2.7, up from 2.4 in August 2024, and up from 2.1 in September 2023. In September 2024, the markets with the lowest months’ supply of inventory were Manchester, NH at 1.1, Seattle, WA, Trenton, NJ and Baltimore, MD tied at

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Most homeowners and renters want to live in a place where abortion is legal, with some survey respondents indicating they’re moving to a different area to live somewhere abortion is legal and accessible Seven percent of Gen Zers who plan to move soon say one reason is to live in a place where abortion is legal and accessible, and one in 20 (5%) millennials say the same thing, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. At least 50% of respondents across every generation said they want to live somewhere abortion is legal, with millennials leading the way; 59% said they want to live in such a place, followed by just over half of both Gen Zers and Gen Xers, and exactly half of baby boomers (note that the oldest baby boomers surveyed were 65). Baby boomers and Gen Xers were mostly likely to say they don’t want to live somewhere abortion is legal (30% each). Overall, 54% of respondents want to live in a place where abortion is legal, compared to 28% who don’t want to. Broken down by political affiliation, more than one-third (35%) of respondents who plan to vote for Donald Trump in the upcoming presidential election want to live in a place where abortion is legal, while 45% of Trump voters don’t want to live in such a place. Three-quarters (75%) of Kamala Harris voters want to live in such a place, and 13% don’t want to. Four percent of Trump voters say they’re moving soon because they want to live in a place where abortion is legal, and 6% of Harris voters say the same thing. The U.S. Supreme Court’s overturning of Roe v. Wade in 2022 means the legality of abortion differs from state to state. For some Americans, that has made the decision about which state to live in more important than it used to be. Kamala Harris promises to federally protect abortion rights, and Donald Trump’s view is murkier; he has expressed support for some version of a national abortion ban, but has also said the issue should be left to the states. Two-Thirds of Young People Want to Live in an IVF-Friendly Place Roughly two-thirds of millennials (64%) and Gen Zers (66%) want to live in a place where IVF and other fertility treatments are easily accessible. Most older respondents also want to live in a place where IVF is accessible: 60% of Gen Xers want to, and 54% of baby boomers. Broken down by political affiliation, most Trump voters (52%) want to live somewhere IVF and other fertility treatments are accessible, compared to 15% who don’t want to. Three-quarters (75%) of Harris voters want to live in such a place; 10% don’t want to. Access to fertility treatments has become a hot button issue as at least one state has effectively ended access to IVF, and other states have introduced legislation to do something similar. Trump and Harris have both said they support access to IVF. The survey findings in this report are from a Redfin-commissioned survey conducted by Ipsos in September 2024. The survey was fielded to 1,802 people aged 18-65. It focuses on two questions, one asking respondents why they’re likely to move in the next year, and one asking about the importance of living in an area where abortion is legal. To view the full report, including charts and more on methodology, please visit: https://www.redfin.com/news/survey-abortion-access-choosing-where-to-live/ Contacts Contact RedfinRedfin Journalist Services:Isabelle Novakpress@redfin.com

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New pending sales higher while prices continue to rise Conditions are improving for buyers in the Mid-Atlantic. Mortgage rates have fallen, inventory is increasing, and buyers have more time to make a decision. While the market is still competitive, this fall will be a better market than buyers have seen in quite some time. Mortgage rates fell to a 20-month low in September and are now just above 6%. The drop in mortgage rates means that prospective homebuyers will save around $300 on the monthly payment of the median-priced home in the region. That drop in rates brought more home shoppers in the market this September. The number of home showings is up in many markets and more offers are being made. There were 19.945 new pending sales across the Bright MLS service area, which is up 10.3% compared to a year ago. “There are many prospective homebuyers who have been waiting for mortgage rates to fall,” said Dr. Lisa Sturtevant, Bright MLS Chief Economist. “The recent drop in rates has motivated both home buyers and home sellers to get into the market, which means that it will likely be a very busy fourth quarter.” Inventory has been increasing for eight consecutive months in the Bright MLS service area. At the end of September, there were 38,205 total active listings, which is up 16.8% compared to a year ago. Despite the steady increases, overall inventory is still just over half of what it was in 2019. The low inventory is the primary reason why home prices in the region continue to rise. In the Bright MLS service area, the median sold price in September was $410,000, which is down from the summer peak but is an increase of 6.4% over last September. Dropping mortgage rates and more supply will continue to drive more buying activity. It will likely be a busy market for the last few months of the year, with 2024 wrapping up stronger than 2023. Affordability challenges remain for some buyers, with prices expected to continue to rise. More affordable markets could see more buyer interest than more expensive regions. September 2024 Mid-Atlantic Housing Market by Region Philadelphia:Lower rates and more inventory could fuel a busy fall market in Philadelphia Baltimore:Market activity has been sluggish, but sales should pick up in the 4th quarter Washington, D.C.:Home sales in the Washington DC region are picking up as mortgage rates fall The full Mid-Atlantic and market metro area reports are available at BrightMLS.com/MarketInsights. SOURCE Bright MLS