SLOW IMPROVEMENT SURE BEATS NO IMPROVEMENT!

Presented by: Elliot F. Eisenberg, Ph.D.

President: GraphsandLaughs, LLCMMG Expert Advisory Board Member

SLOW IMPROVEMENT SURE BEATS NO IMPROVEMENT!

In addition to contributing to the Mortgage Market Guide Expert Advisory Board, Elliot Eisenberg, Ph.D. is a nationally acclaimed economist and former Senior Economist with the National Association of Home Builders in Washington, DC. He is a national speaker on the economic impact of homebuilding, consequences of government regulation, cost-benefit analysis, strategic business development and other current economic issues.

Elliot F. Eisenberg, Ph.D.

Here’s What We’ll Cover• What do your clients need to know about interest rates - and

how can you get them off the fence and into action?

• Could QE3 spark inflation this year and cause home loan rates to rise?

• How long will the Fed support the mortgage market? • Is the budget deficit really a concern?

• Can the improvement in the U.S. economy continue?

The Data!

Historical Job Growth Month over Month Employment Change

Net New Payroll Jobs Per Month

Total Employment Levels Well Below PeakTotal Non-farm Employment

Real Per Capita Disposable Income is Flat

Annual Y-o-Y Percent Change in GDP

Trucking Tonnage Has Recovered

Container Traffic Has More Than Recovered

As Have Factory Utilization Rates

As Have Orders for Capital Goods

ISM Non-Manufacturing Numbers are Up!

Corporate Profits are Growing Dramatically

The Stock Market is Doing Very Well

Commercial Real Estate is Recovering

Money is Not Being Lent

Monetary Velocity Drops Like a Rock

Core PCE Price Index: No Inflation Anywhere!!

Thus Low, but Not Lower Interest Rates!

Consumer Confidence While Historically Low, is Up!

Same With Small Business Confidence

ISM Numbers are Down but Holding!

Trade Deficit is Flattening Out….Maybe Worsening

It may slightly hinder employment growth

Budget Situation Looks Bad but……….

It is Improving…See!

Budget Situation is Bad but Improving….Really!

Budget Situation is Improving. Really It is!

Best of All, No Recession is in the Cards!

What About Housing?

House Prices Have Bottomed….Really They Have!!!!Real house prices

Negative Equity is Less and Less of a Problem

Seriously Delinquent Loans Trending Lower

Even in Hard Hit San Bernardino, CA

Foreclosures are Declining as a % of Sales

REO Inventory is declining too!

Existing Home Inventories Are Falling Fast

MBA Mortgage Purchase Applications – Ignore Noise!

Investors are keeping them down

Households are Repairing their Balance SheetsMore Income to Spend Elsewhere

New Home Prices – In Recovery Mode

Single-Family Starts – Beginning a Recovery

Existing Single-Family Home Sales

U.S. Home Ownership Rate Continues to Fall

Multifamily Housing Starts Stupendous Response from Growth in

Renters!!!!!

Lumber Prices are a Problem!

What About Things Here?

Things Look Pretty Good

The Future Looks So Bright, I’ll Need Shades

But…..Maybe Not due to Sequestration!

A Large Share of Mortgages Are Underwater% of Total Mortgages

Let’s Do this Without A Lawyer, Thank You!

Center of the Country is Strongest

FL #1NV #2AZ #3GA #4IL #5CA #6

State Unemployment RateSignificant differences across states

%

House Price Recovery Rates Vary

Significant differences across cities

House Price Recovery Rates Vary Significant differences across states

Long Road Back to Normal* for Single-Family Housing Starts – Q4 2013

* Normal is the average from Q1 2000 to Q4 2003

* Normal Production is measured as Single-Family housing starts between Q1

2000 and Q4 2003

Single-Family Housing StartsRelative to Normal

Less than 45%

45% to 49%49% to 61%61% to 70%Greater than 70%