5. $0-100K $100-250K $250-500K $500-750K $750K-1M $1M+
% Sales +/- -12% -5.1% 0.2% 0.3% 2.4% 5%
-12%
-5.1%
.2% .3% 2.4%
5%
-14%
-12%
-10%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
% Change in Sales
From Last Year
by Price
Range
NAR 6/13/2014
6. 0%
5%
10%
15%
20%
25%
30%
35%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May
Percentage of
Distressed
Property
Sales
35%
11%
18%
NAR 6/2014
9. “It’s not that Millennials and
other potential homebuyers
aren’t qualified in terms of
their credit scores or in how
much they have saved for
their down payment.
It’s that they think they’re not
qualified or they think that
they don’t have a big enough
down payment.”
Housing Wire Commenting on a Study by Nomura
10. The DOWN PAYMENT
Biggest Misconception about Mortgages
39%
38%
42%
36%
37%
38%
39%
40%
41%
42%
All Respondents 25-29 Year Olds 30-34 Year Olds
Percentage of respondents to Zelman & Assoc
survey who believe that you need a minimum
of a 15% down payment to purchase a home.
Freddie Mac 6/2014
11. The DOWN PAYMENT
According to Freddie Mac:
•A person “can get a conforming, conventional mortgage
with a down payment of as little as 5 percent (sometimes
with as little as 3 percent coming out of their own
pockets)”.
•Freddie Mac's purchase of mortgages with down
payments under 10 percent more than quadrupled
between 2009 and 2013.
•More than one in five borrowers who took out
conforming, conventional mortgages in 2014 put down
10 percent or less.
Freddie Mac 6/2014
12. Letting more consumers know how down
payments are determined could bring
more qualified borrowers off the sidelines.
Depending on their credit history and other
factors, many borrowers can expect to
make a down payment of about 5 or 10
percent.
Christina Boyle
Freddie Mac VP and Head of Single-Family
Sales & Relationship Management
14. 5.2
4.7
5.1
5.4
Freddie Mac Fannie Mae
MBA NAR
30 Year Fixed Rate Mortgages
Actual Rates
January 2013 – June 2014
Projected Rates
June 2014 – 2015 4Q
1/2013 6/2014 10/2015
16. 1/2013 6/2014
4.2
4.4
4.6
4.8
5
5.2
2014 3Q 2014 4Q 2015 1Q 2015 2Q 2015 3Q 2015 4Q
Freddie Mac
Projected Rates
June 2014 – 2015 4Q
Freddie Mac 6/2014
30 Year Fixed Rate Mortgages
Freddie Mac Rates
January 2013 – June 2014
17. Date Mortgage Interest Rate* P&I**
Today $250,000 4.17% $1,218.17
July 2015 $260,000 4.8% $1,364.13
*Average Commitment Rate per Freddie Mac **Principal and Interest Payment
$145.42Difference in Monthly Payment
Monthly Annually Over 30 Years
$145.42 $1,745.04 $52,351
18. Date Mortgage Interest Rate* P&I**
Today $100,000 4.17% $487.27
July 2015 $104,000 4.8% $545.65
*Average Commitment Rate per Freddie Mac **Principal and Interest Payment
$58.38Difference in Monthly Payment
Monthly Annually Over 30 Years
$58.38 $700.56 $21,017
19. Date Mortgage Interest Rate* P&I**
Today $500,000 4.17% $2,436.34
July 2015 $520,000 4.8% $2,728.26
*Average Commitment Rate per Freddie Mac **Principal and Interest Payment
$291.92Difference in Monthly Payment
Monthly Annually Over 30 Years
$291.92 $3,503.04 $105,091
20. Date Mortgage Interest Rate* P&I**
Today $1,000,000 4.17% $4,872.68
July 2015 $1,040,000 4.8% $5,456.52
*Average Commitment Rate per Freddie Mac **Principal and Interest Payment
$583.84Difference in Monthly Payment
Monthly Annually Over 30 Years
$583.84 $7,006.08 $210,182
21. Decade Average Rate Payment
1970s 8.86% $1,589
1980s 12.7% $2,166
1990s 8.12% $1,484
2000s 6.29% $1,237
July 2014 4.17% $975
The average 30-year fixed mortgage rates and the approximate payment for a $200,000 mortgage.
Payments are principal & interest only, based on a $200,000 fully amortizing mortgage.
All terms are assumed to be 30 years.
Freddie Mac 7/2014
Historic Mortgage Rates by Decade
26. The Impact of Monthly Housing
Inventory on Home Prices
LESS THAN
6 MONTHS
BETWEEN
6-7 MONTHS
GREATER THAN
7 MONTHS
SELLERS
MARKET
Homes prices
will appreciate
NEUTRAL
MARKET
Homes prices
will only
appreciate with
inflation
BUYERS
MARKET
Homes prices
will depreciate
34. Resources
Slide Slide Title Link
4,6,7,27,28,
29,30
Existing Home Sales, Percentage of Distressed
Property Sales, Pending Home Sales, Months
Inventory of Homes for Sale, Year-over-Year
Inventory Levels
http://www.realtor.org/
5 % Change in Sales from Last Year
http://economistsoutlook.blogs.realtor.org/2014/06/13/existing-home-sales-by-price-tier/#sf3291580
8 Foot Traffic https://magic.piktochart.com/output/2155255-foot-traffic-may-2014?sf3290807=1
9 Housing Wire Comments
http://www.housingwire.com/blogs/1-rewired/post/30441-nomura-fear-is-keeping-demand-pent-up
10,11 The Down Payment, Christina Boyle Quote
http://www.freddiemac.com/news/blog/christina_boyle/20140616_mortgage_down_payments.html
13 30 Year Fixed Rate Mortgages http://www.freddiemac.com/pmms
14, 15
30 Year Fixed Rate Mortgages, Mortgage Rate
Predictions
http://www.freddiemac.com/finance/pdf/June_2014_public_outlook.pdf
http://www.mortgagebankers.org/files/Bulletin/InternalResource/88467_.pdf
http://www.fanniemae.com/resources/file/research/emma/pdf/Housing_Forecast_062414.pdf
http://www.realtor.org/sites/default/files/reports/2014/embargoes/phs-06-30/forecast-07-2014-us-econom
16 30 Year Fixed Mortgage Rates http://www.freddiemac.com/finance/pdf/June_2014_public_outlook.pdf
17 Historic Mortgage Rates by Decade http://www.freddiemac.com/blog/research_and_analysis/20140324_dirt_cheap_to_cheap.html
24,25 S&P Case-Shiller Home Price Indices
http://www.housingviews.com/wp-content/uploads/2014/06/CSHomePrice_Release_April2014-
results.pdf
31 New Home Sales 2004-2014 http://www.usatoday.com/story/money/business/2014/06/24/may-new-home-sales/11304161/
KEEPINGCURRENTMATTERS.COM
35. Resources
Slide Slide Title Link
32 New Home Sales 2013 and 2014 http://www.calculatedriskblog.com/2014/06/comments-on-housing-and-new-home-sales.html
33 New Home Sales
http://realtormag.realtor.org/daily-news/2014/06/18/builders-turn-agents-in-finding-qualified-
buyers#sf3351519
39-61 Reasons to Own
http://www.jchs.harvard.edu/research/publications/believing-homeownership-behavioral-drivers-
housing-tenure-decisions
62 Seth Godin Quote
http://sethgodin.typepad.com/seths_blog/2014/06/more-people-saying-less-and-a-few-people-
saying-more.html
KEEPINGCURRENTMATTERS.COM
38. 15 ‘MAJOR’ REASONS TO OWN A HOME
as per a survey by the Joint Center for Housing Studies at Harvard University
* the reasons are in no particular order