Presentation Transcript

1. Rocky Mountain District Symposium Homeownership Trends and Data The Brown Palace Hotel - Denver June 28 – 30, 2011
2. Critical Homeownership Program Issues Economic Unemployment still high; Home foreclosures are still affecting market; Home values still falling or staying flat; Regulatory “Qualified Mortgage”, Risk Retention; Unclear future of GSE reform; FHFA very conservative; IRS 501Q
3. Most Jobs Lost Since Post-WW2 Era 3
4. Unemployment Rates – May 2011 Source: US Bureau of Labor Statistics
5. Ten States Account for Almost 70% of All U.S. Loans in Foreclosure Percent of All Loans in Foreclosure Top Six States Account for Almost 50% of Loans in Foreclosure as of 4Q 2010 Source: National Delinquency Survey, Mortgage Bankers Association, Fourth Quarter 2010. 5
6. Rocky Mountain District Source: National Delinquency Survey, MBA, Fourth Quarter 2010
7. U.S. Home Prices Have Been on a Wild Ride S&P/Case-Shiller U.S. National Home Price Index: 1988-2010 Sources: National Association of Realtors, S&P Case-Shiller Index. Data through November 2010
8. Home Prices May Still Drop in Some Areas House Price Correction from Current (2010Q1) to Trough, % U.S.= 5% < 0.75% 0.75% to 2% 2% to 5% > 5% Sources: Fiserv, FHFA, Moody’s Analytics 8
9. Almost 11 Million Homeowners with Negative Equity as of 3Q. 2010
10. Mortgage Foreclosure Rates Sources: Mortgage Bankers Association, S&P Case-Shiller Index. Data through November 2010
11. Weak Economy Is Exacerbating Foreclosures for All Loan Types Subprime ARMs Prime ARMs FHA Source: National Delinquency Survey, Mortgage Bankers Association, Fourth Quarter 2010. 11
12. Projected Mortgage Resets through 2012 12
13. Critical Homeownership Program Issues Lending Credit markets remain very tight; Many markets are experiencing appraisal issues; MBS market showing some signs of sub-prime getting back into the market; Core homeownership funding under threat HUD Housing Counseling Program has been cut; HOME, CDBG and Rural Development also were cut; CDFI could take a cut (maybe as much as $183 million); State and Local governments face budget shortfalls;
14. Bank Failures from 2008 - 2010 According to the its website, the FDIC is often appointed as receiver of failed banks. The FDIC assisted with 340 bank failures between 2008 and Feb. 2011. This compares with three (3) bank failures during the prior three-year period between 2005-2007. Sources: Thechartstore.com; Federal Deposit Insurance Corporation, February 2011.
15. The Rising Deficit Will Constrain Federal Budget for Foreseeable Future Record Federal OutlaysSpending Increase While Receipts Collapse
16. 44 States Expecting Serious Budget Shortfalls in 2011-2013 Source: Center on Budget and Policy Priorities, February 2011.
17. Homeownership Rate Declining Since 2005 Sources: U.S. Census Bureau; Federal Reserve Bank of St. Louis.
18. Homebuyers Created by NeighborWorks Network 19
19. Homebuyers Created in Rocky Mountain District
20. Who Are Our Homebuyers
21. Critical Homeownership Program Issues Role of CFPB – Consumer Financial Protection Bureau (www.ConsumerFinance.gov) Nonbank supervision Program; Consumer credit, consumer reporting services, debt collection, debt relief services, pre-paid cards, check-cashing and money transmitting services; Agency goes ‘live’ July 21st;
22. Universe of Housing Counseling Providers As of 2008, there were 1,800 HUD approved counseling agencies with broad range of missions and services – approximately 27 Intermediaries; There was at least one counseling agency in nearly a third of all counties–which account for four-fifths of the national population; HUD grants are the first or second largest funding source for nearly half of all counseling agencies—particularly for smaller agencies; Homebuyer Education and Counseling has historically been supported by government and philanthropic resources;
23. Counseling Disproportionately Helps Disadvantaged Families and Individuals Source: The State of the Housing Counseling Industry, HUD, 2008; Worst Case Housing Needs: 2009 A Report to Congress, HUD 2011; US Census Bureau, Decennial Census 2010.
24. Increasing Affordability Problems Suggest Greater Need for Owner and Renter Counseling Increase in Households Paying More than 50% of Income for Housing 2001-2009 (000s)
25. Foreclosure Counseling has Proven Impact Counseling does at least three things to improve sustainability of loans: Raises the rate of receiving a modification that cures a serious delinquency or foreclosure; Larger reduction in monthly mortgage payments in modified and cured loans; and Improves the sustainability of modified and cured loans beyond the impact on monthly payments, presumably through financial counseling and, in some cases, assistance. Source: Urban Institute – NFMC Study
26. HECM Counseling Provides Critical Resources Over 40% of clients are lower-to-middle income families who may not have access to a financial advisors Since September 15 2010, 38,650 HECM counseling clients have received a BenefitsCheckUp screening. 88% could be eligible for one or more benefits. Potential value of benefits could be $197 million. Public-private approach to maintaining independence. Counselors address both immediate budget shortfalls and challenges to aging in place. Help seniors to think strategically about home equity. Discuss exit strategies to reduce foreclosure risk. Source: National Council of Aging
27. Opportunities Ahead Personal savings are up U.S. households debts are down Mortgage rates are near 50-year lows With low rates and low housing prices, affordability is greatly improved Household growth has slowed but continues U.S. population is growing more diverse First-time homebuyers are driving the market Technological changes can help reach new buyers 32
28. Technology Spreads According to recent federal study, only 5-10% of Americans do not have access to Broadband Internet services
29. U.S. Demographic Changes: 2000 - 2010 U.S. population has grown to 311 million and is increasingly diversified Household growth has slowed but will continueover the next two decades Hispanics accounted for 50% of national growth since 2000 (compared with 14% of Asians, 13% for blacks and 17% for whites) Immigrants now comprise 12.6% of the total U.S. population (and 44% of those residents under age 15) From 2000-2007, the U.S. foreign-born population grew by 22% to 38 million By 2007, 30% of the nation’s foreign-born population were from Mexico and 23% from Latin America Source: Willam Frey, Recent Demographic Trends in Metropolitan America, Brookings Institution, 2010
30. Record Numbers of Young Householders by 2025 Source: The State of the Nation’s Housing Report 2010. Joint Center for Housing Studies
31. Growing Diversity of the U.S. Population The generations following the Baby Boomers are large and diverse. Over 40% of future first-time buyers will minority buyers Born 1977-1997 Born 1965-1976 Born 1946-1964 Source: The State of the Nation’s Housing Report 2010. Joint Center for Housing Studies
32. Future Homeownership Markets Housing will be driven by four demographic groups for next 5 – 10 years: Older Baby Boomers – who will become seniors, retiring and/or downsizing Younger Baby Boomers – many will be unable to sell their ‘underwater homes’ to move to new jobs and may have older children living in their household Generation Y –who will graduate from college with large school loans and who may rent longer than previous generations New immigrants and their households
33. First-Time vs Repeat Buyers First-time homebuyers are significantly younger and unmarried than repeat buyers Source: National Association of Realtors – “2009 Profile of Home Buyers and Sellers”
34. Many First-Time Buyers Are Unmarried Single females, single males and unmarried couples are significant target markets Source: National Association of Realtors – “2009 Profile of Home Buyers and Sellers”
35. Age Breakdown of Home Buyers in 2009 Source: National Association of Realtors – “2009 Profile of Home Buyers and Sellers”
36. Home Buyers By Age Cohorts in 2009 First-time homebuyers are skewing younger Source: National Association of Realtors – “2009 Profile of Home Buyers and Sellers”
37. First Step Taken in Home Search Classes and counseling efforts are only capturing a tiny share of home buyers Source: National Association of Realtors – “2009 Profile of Home Buyers and Sellers”
38. Use of Internet in Home Search Vast majority of homebuyers use the Internet at home or work to search for homes Source: National Association of Realtors – “2009 Profile of Home Buyers and Sellers”
39. What does this mean? Housing counseling industry must embrace standards such National Industry Standards—raise the visibility that is this a highly trained group of professionals who are held to rigorous standards; Diligent about tracking pipelines and results---through use of sophist acted customer tracking systems---they not just for reporting anymore; Become more self examining---as way of illustrating the value proposition; Mine success stories of successful customers---have them spread the word to your circles on influence; Use internal and external market data to target services –not one-size fits all; Leverage technology and innovative partnerships; Market to a different homebuyer; maybe a new way to deliver services
40. Rocky Mountain District Symposium Homeownership Trends and Data The Brown Palace Hotel - Denver June 28 – 30, 2011