June 19, 2008 Economic Outlook Wilmington-Cape Fear HBA Wilmington, NC Douglas McWilliam Vice President- Secondary Marketing Relationship Manager Wachovia Corporate & Investment Bank
May 25, 2015
June 19, 2008
Economic Outlook
Wilmington-Cape Fear HBA Wilmington, NC
Douglas McWilliamVice President- Secondary Marketing Relationship Manager
Wachovia Corporate & Investment Bank
Wachovia Economics Group 2
I. National Economic Overview
II. Residential Real Estate Summary
III. North Carolina
Appendix
Wachovia Economics Group 3
National Economic Overview
Wachovia Economics Group 4
Tax rebates may short circuit outright declines in Real GDP.
With a deteriorating labor market, personal consumption will be weak at best, except for a brief pickup mid-year from the fiscal stimulus package.
We now see outright declines in business spending, as firms become more cautious considering the weak economic picture and tightening credit conditions.
The worst of the decline in residential construction is now behind us, but homebuilding will continue to fall throughout 2008 and early 2009.
HighlightsReal GDP
Bars = Compound Annual Growth Rate Line = Yr/Yr Percent Change
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
1998 2000 2002 2004 2006 2008
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
GDPR - CAGR: Q1 @ 0.9%GDPR - Yr/Yr Percent Change: Q1 @ 2.5%
Forecast
Nonfarm Employment ChangeTotal Employed in Thousands
-400
-300
-200
-100
0
100
200
300
400
500
2000 2001 2002 2003 2004 2005 2006 2007 2008
-400
-300
-200
-100
0
100
200
300
400
500
Nonfarm Employment Change: May @ -49,000
Surging Energy Prices And The Still Unfolding Housing Slump Have Pushed The Economy Over The Edge
U.S. Economic Overview
Source: Federal Reserve Board, U.S. Department of Commerce, U.S. Department of Labor and Wachovia Corp.
National Economic Overview
Wachovia Economics Group 5
U.S. Economic Overview
Surging Energy Prices And The Still Unfolding Housing Slump Have Pushed The Economy Over The Edge
National Economic Overview
Actual Forecast
2004 2005 2006 2007 2008 2009
Real Gross Domestic Product 2 3.6 3.1 2.9 2.2 1.4 1.9
Personal Consumption 3.6 3.2 3.1 2.9 1.9 1.9Business Fixed Investment 5.8 7.1 6.6 4.7 -0.1 -4.0
Equipment and Software 7.4 9.6 5.9 1.3 -0.3 -1.7
Consumer Price Index3 2.7 3.4 3.2 2.9 4.0 2.6
Corporate Profits Before Taxes3 23.2 6.1 12.2 2.6 -2.4 6.3
10-Year Treasury Note 4.24 4.39 4.71 4.04 3.90 4.501Forecast as of: May 7, 2008 2Compound Annual Growth Rate 3 Year-over-Year Percent Change
Wachovia U.S. Economic Forecast
Depending on oils ripple effect Depending on the dollar
Wachovia Economics Group 6
Consumer Overview
Consumers Are Getting Squeezed On Many Fronts
Energy & Food Costs Food and energy continue to eat a
larger share of consumer income. Housing & Home Equity
Housing prices and home equity are now falling, weighing on consumer spending and sentiment.
Weakening Labor Market The labor market is expected to
continue its weakening trend for at least the rest of the year.
Discretionary Spending
Furniture & HHEquip
4%
Recreation4%
Clothing & Shoes4%
Alcohol & Tobacco3%
Motor Vehicles4% Food Away from
Home5%
Housing Away from Home
1%
Other Discretionary
19%
Non-Discretionary56%
April-2008
Labor Market Despite the weakening labor
market, unemployment remains near what is considered full employment.
Income Growth While we expect that income
growth will slow in-line with a weaker labor market, it’s still up five percent year-over-year. We also will see a pick-up from the tax rebates.
Negative
Discretionary Consumer Spending
PositiveRetail Sales Ex. Auto and Gas vs. Income Growth
3 Month Moving Averages
-5.0%
-2.5%
0.0%
2.5%
5.0%
7.5%
10.0%
12.5%
15.0%
96 97 98 99 00 01 02 03 04 05 06 07 08
-5.0%
-2.5%
0.0%
2.5%
5.0%
7.5%
10.0%
12.5%
15.0%
Disposable Personal Income Yr/Yr % Change: Apr @ 4.8%3 Month Annual Rate: Apr @ 1.3%
Stock Market Bubble
Tax Cut 1
Tax Cut 2 Housing Refi Boom
Source: U.S. Department of Commerce, and Wachovia Corp.
National Economic Overview
Wachovia Economics Group 7
The real trade balance has been improving in recent months, on phenomenal export growth, fueled by a weak dollar and strong global growth. The nominal deficit has remained wider on energy price changes.
Real final sales to domestic purchasers, a measure of what the economy consumes, as opposed to produces, shows a much weaker picture than real GDP. This measure is more indicative of how businesses and consumers are feeling.
Highlights
Real Final Sales to Domestic PurchasersBars = Compound Annual Growth Rate Line = Yr/Yr Percent Change
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
1998 2000 2002 2004 2006 2008
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
Real Final Sales to Dom. Purchasers - CAGR: Q1 @ -0.1%Real Final Sales to Dom. Purchasers - Yr/Yr Percent Change: Q1 @ 1.4%
Forecast
Trade Balance In Goods3 Month Moving Average - In Billions
-$80
-$70
-$60
-$50
-$40
-$30
-$20
-$10
$0
97 98 99 00 01 02 03 04 05 06 07 08
-$80
-$70
-$60
-$50
-$40
-$30
-$20
-$10
$0
Nominal Trade Balance: Mar @ -$70.0 Billion
Real Trade Balance: Mar @ -$49.3 Billion
The Economy Feels Weaker Than the GDP Data Indicate
U.S. Economic Overview
Source: U.S. Department of Commerce and Wachovia Corp.
National Economic Overview
Wachovia Economics Group 8
U.S. Economic Overview
Nominal GDP, a measure of ‘revenue growth’ for the economy continues to grow at a below trend pace, which means corporate revenue growth will remain sluggish.
Inventories are relatively lean and are unlikely to see the large declines of previous recessions.
Highlights
Change in Real Inventories USD Billions, Annual Rate
-$100
-$75
-$50
-$25
$0
$25
$50
$75
$100
$125
1998 2000 2002 2004 2006 2008
-$100
-$75
-$50
-$25
$0
$25
$50
$75
$100
$125
Change in Private Inventories: Q1 @ -$14.4B
Forecast
Nominal GDP Compound Annual Growth Rate
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
1998 2000 2002 2004 2006 2008
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
Nominal GDP - CAGR: Q1 @ 3.5%Nominal GDP - Yr/Yr Percent Change: Q1 @ 4.7%
Forecast
The Economy Feels Weaker Than the GDP Data Indicate
Wachovia Economics Group 9
Mortgages are more expensive than they have historically been. Restrictive lending standards have also made them more difficult to obtain.
Corporate credit is also more costly but businesses are tapping the market anyway to build a capital cushion.
Yield Curve SpreadBasis Points
-50
0
50
100
150
200
250
300
1996 1998 2000 2002 2004 2006 2008
-50
0
50
100
150
200
250
30010Y - 2Y: May @ 144.0 bps
HighlightsConventional Mortgage to 10-Year Treasury Spread
Basis Points
100
125
150
175
200
225
250
1996 1998 2000 2002 2004 2006 2008
100
125
150
175
200
225
250
Mortgages: May @ 190.0 bps
We Are Not Out of the Woods Yet
Credit Spreads & The Yield Curve
Source: Bloomberg LP, Federal Reserve Board, International Monetary Fund and Wachovia Corp.
Baa Corporate Spread Basis Points
100
150
200
250
300
350
400
1996 1998 2000 2002 2004 2006 2008
100
150
200
250
300
350
400
Corporates: May @ 305.0 bps
National Economic Overview
Wachovia Economics Group 10
Global growth has been very strong, but should moderate this year.
Some foreign central banks have begun easing, we expect others will follow suit as growth slows and inflation subsides.
The dollar should begin to appreciate versus European currencies as the Fed easing cycle comes to an end late this year.
(End of Quarter Rates)2008 2009 2010
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Major CurrenciesEuro ($/ €) 1.55 1.50 1.46 1.42 1.36 1.30 1.26 1.24U.K. ($/ £) 1.96 1.93 1.92 1.88 1.84 1.76 1.72 1.70U.K. (£/ €) 0.79 0.78 0.76 0.76 0.74 0.74 0.73 0.73Japan (¥/ $) 106 110 114 116 118 120 122 125
Other IndustrializedCanada (C$/ US$) 1.02 1.06 1.10 1.14 1.18 1.20 1.22 1.24Switzerland (CHF/ $) 1.05 1.09 1.13 1.16 1.22 1.28 1.32 1.34Norway (NOK/ $) 5.10 5.25 5.35 5.50 5.65 5.90 6.00 6.10Sweden (SEK/ $) 6.05 6.20 6.35 6.50 6.70 7.00 7.20 7.25Australia (US$/ A$) 0.92 0.88 0.84 0.80 0.78 0.76 0.74 0.72
1Data as of: May 7, 2008
Wachovia Major Currency Forecast Trade Weighted DollarMajor Curency Index, 1973 = 100
65.0
70.0
75.0
80.0
85.0
90.0
95.0
100.0
105.0
110.0
115.0
1998 2000 2002 2004 2006 2008
65.0
70.0
75.0
80.0
85.0
90.0
95.0
100.0
105.0
110.0
115.0
Trade Weighted Dollar : Q1 @ 70.31
Forecast
Highlights Real Global GDP GrowthYear-over-Year Percent Change
0.0%
2.0%
4.0%
6.0%
8.0%
1970 1975 1980 1985 1990 1995 2000 2005
0.0%
2.0%
4.0%
6.0%
8.0%
Period Average
Real Global GDP GrowthYear-over-Year Percent Change, 4th Quarter 2007
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
China India Russia Brazil UK Japan
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
Global Growth Remains Steady But The Dollar Is Poised For a Turnaround in the Second Half
Global Growth & The Dollar
Source: Bloomberg LP, Federal Reserve Board, International Monetary Fund and Wachovia Corp.
National Economic Overview
Wachovia Economics Group 11
Timeline of a Financial Crisis
$0
$10
$20
$30
$40
$50
1 Aug 29 Aug 26 Sep 24 Oct 21 Nov 19 Dec 16 Jan 13 Feb 12 Mar 9 Apr 7 May
1%
2%
3%
4%
5%
6%
March 7Increases size of two March cash auctions to $50 billion each and pledges to continue sales till September. Plans for $100 billion of new 28-day repos. MBS
become acceptable collateral.
11New liquidity auction, the TSLF, providing
Treasuries in exchange for private MBS.
14Fed opens its discount window to Bear
Stearns through J PMorgan.
16New York Fed agrees to a $30B loan to finance the J PMorgan aquizition of Bear Stearns. Discount window is opened to primary dealers. Spread is further cut between primary credit and target rate.
Feb. 1Announces two more $30B TAF
auctions in Feb.
29Announces two more $30B TAF auctions in March.
J an 4, 2008 Increases size of J anuary TAF auctions to $30B.
Aug. 9, 2007BNP Paribas freezes three asset backed funds in face of
illiquidity.
Discount Window Lending (Left Axis)
Fed Funds Rate (Right Axis)
March 18FOMC cuts the target rate 75 bps to 2.25%.
J an. 30FOMC cuts the target rate 50 bps.
Dec. 12First term loan auctions (TAF) are announced. Two December auctions for
$20B each are scheduled.
18Proposed new rules to ban pre-payment penalties on mortgages and to overhaul
no and low documentation loans.
19First TAF auction brings 93 bidders.
Lends $20B at a stop-out rate of 4.65%.
21Announces continuation of TAF facility into J anuary.
Dec. 11FOMC cuts the target rate 25 bps.
Oct. 31FOMC cuts the target rate 25 bps.
Aug 17. 2007Fed Narrows spread 50bps between the federal funds rate & the primary credit rate.
Sep. 18FOMC cuts the target rate 50 bps.
J an. 22, 2008FOMC cuts the target rate 75 bps in an intermeeting move.
April 30FOMC cuts the target rate 25 bps.
A Crisis Timeline: Eight Months of Fed Maneuvering
The Fed will
continue to
innovate until
financial markets stabilize
Source: American Banker and Wachovia Corp.
National Economic Overview
Wachovia Economics Group 12
Results of the current credit crisis
MBS to Treasury Price Spreads
Wachovia Economics Group 13
Residential Real Estate Summary
Wachovia Economics Group 14
Homebuilders
Overall Starts Remain Volatile But on a Downward Trend
While we are not ready to call the current low of 954K starts in March the low water mark, we believe we are closing in on the cycle bottom. Starts may fall another five to ten percent from here, but many of the worst markets are already seeing little to no new activity and simply cannot decline any further. The volatility in multi-family starts over the first half of 2008 was fueled by funding problems at a few large lenders. Those problems have largely been resolved and apartment starts have bounced back. The improvement makes the overall numbers look a little better but single-family starts show no sign of bottoming.
Overall Starts Remain Volatile But on a Downward Trend
Housing Starts Seasonally Adjusted Annual Rate - In Millions
0.8
1.0
1.2
1.4
1.6
1.8
2.0
2.2
2.4
00 01 02 03 04 05 06 07 08
0.8
1.0
1.2
1.4
1.6
1.8
2.0
2.2
2.4Housing Starts: Apr @ 1.032 Million
Wachovia Economics Group 15
Homebuilders
Housing Permits(Cumulative Percent Decline from Peak)
April 2008
<-65.0%-65.0% < -60.0%-60.0% < -55.0%-55.0% < -50.0%
>-50.0%
Permits in the worst housing markets are rapidly approaching or are already essentially at near zero levels. Some states have seen permits decline more than 80 percent from their peak levels. Permits did bounce higher in April for the first time since last Spring. Like starts, we think that the declines are mostly behind us, but would not rule out a few more small declines this summer. Much more of today’s decline in single-family permits is due to deteriorating credit conditions than to oversupply. The builder inventory of unsold homes has fallen considerably, even in massively overbuilt markets like Florida, California, and Arizona
Permits Are Rapidly Approaching Zero in Many Markets
Wachovia Economics Group 16
Homebuilders
Housing Permits Seasonally Adjusted Annual Rate - In Millions
0.8
1.0
1.2
1.4
1.6
1.8
2.0
2.2
2.4
00 01 02 03 04 05 06 07 08
0.8
1.0
1.2
1.4
1.6
1.8
2.0
2.2
2.4Total Permits: Apr @ 0.98 Million
Wachovia Economics Group 17
Homebuilders
New home sales have been declining for the past two and a half years, but the slide is beginning to show signs of moderating and may bottom out in the next few months. The new home market has worked off far more excess inventory (though there is still a long way to go) than the existing home market, as builders have been more willing to cut prices to the new equilibrium levels. If inventories continue to decline at the same pace as they have over the past year, the total number of new homes available for sale would return to its relatively low late 1990s level in about 18 months. Significant nearly new inventory still exists in the resale market, however.
New Home SalesSeasonally Adjusted Annual Rate - In Thousands
300
500
700
900
1100
1300
1500
89 91 93 95 97 99 01 03 05 07
300
500
700
900
1100
1300
1500
New Home Sales: Apr @ 526.03 Month Moving Average: Apr @ 535.7
Highlights
Wachovia Economics Group 18
Homebuilders
Existing home sales also show tentative signs of a bottoming, even in hard hit areas like Fort Myers and West Palm Beach. Foreclosure sales in Florida, California and Arizona are helping boost the overall figures but are also fueling price declines. Sales of foreclosed homes provide tough competition for other sellers, causing inventories to rise. The increase in April almost entirely erased all of the improvement eked out over the previous six months. With builder inventory declining, we expect the resale market to gradually strengthen over the next 18 months. Higher fuel costs are also helping boost demand for homes located closer to key employment centers.
Existing Home Sales
Existing Home Resales Seasonally Adjusted Annual Rate - In Millions
4.5
5.0
5.5
6.0
6.5
7.0
7.5
1999 2001 2003 2005 2007
4.5
5.0
5.5
6.0
6.5
7.0
7.5
Existing Home Sales: Apr @ 4.89 Million
Wachovia Economics Group 19
Homebuilders
Inventory of Existing Homes for SaleExisting Homes for Sale at End of Month, In Thousands
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
1999 2001 2003 2005 2007
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
Total Inventory: Apr @ 4,552,000 Homes
Pending Home Sales Index Year-over-Year Percent Change
-30%
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
2002 2003 2004 2005 2006 2007 2008
-30%
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
Year-over-Year Change: Mar @ -20.1 %
Wachovia Economics Group 20
Homebuilders
Delinquencies Continue to Rise, Government to the Rescue? Homebuilding
The overall mortgage delinquency rate increased 53 basis points to 6.35 percent in the first quarter. The delinquency rate on prime loans rose 47 basis points to 3.71percent, while the delinquency rate on subprime mortgages surged 148 basis points to 18.8 percent. Nevada, Arizona, Florida, and California are once again at the top of the list in terms of gains in the delinquency rates, along with Louisiana and Mississippi. Credit quality is deteriorating rapidly on both prime and subprime mortgages, but the biggest problem, by far, is subprime adjustable rate mortgages. Credit quality is a lagging indicator and will not likely meaningfully improve for at least another year.
Conventional Mortgage Loan Delinquency Percent of Loans Past Due, Seasonally Adjusted
1.6%
2.0%
2.4%
2.8%
3.2%
3.6%
4.0%
1998 2000 2002 2004 2006 2008
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
Total Prime: Q1 @ 3.7% (Left Axis)Total Subprime: Q1 @ 18.8% (Right Axis)
Wachovia Economics Group 21
Homebuilders
Subprime ARMs 60+ DelinquenciesPercent Delinquent by Vintage
0%
5%
10%
15%
20%
25%
30%
35%
1 6 11 16 21 26 31 36 41 46
0%
5%
10%
15%
20%
25%
30%
35%
2005
2006
2000
2007
2001
Adj. Rate Mortgage Loan Delinquency Percent of Loans Past Due, Seasonally Adjusted
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
1998 2000 2002 2004 2006 2008
4.0%
8.0%
12.0%
16.0%
20.0%
24.0%
28.0%
Prime ARM: Q1 @ 6.8% (Left Axis)Subprime ARM: Q1 @ 22.1% (Right Axis)
Wachovia Economics Group 22
Homebuilders
Foreclosures Continue to Climb
• Foreclosures are still rising. The Mortgage Bankers Association (MBA) reported that foreclosures surged 43 basis points to 2.47 percent during the first quarter, up 119 basis points over the past year. Foreclosure starts on prime fixed rate loans rose just 7 basis points to 0.29 percent, while starts on prime adjustable rate mortgages (ARMs) rose 49 basis points to 1.55 percent. The biggest problem is subprime ARMS, which saw foreclosure starts surge 106 basis points during the first quarter. Subprime ARMs account for just 6 percent of all mortgages outstanding but accounted for nearly 40 percent of all foreclosures started during the first quarter.
Foreclosure RatePercent of All Loans in Foreclosure
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
2002 2003 2004 2005 2006 2007 2008
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
Loans in Foreclosure: Q1 @ 2.5%
Wachovia Economics Group 23
Homebuilders
Mortgage ApplicationsApplications Slide AnewApplications for purchase have renewed their downward trend amid tighter credit standards. Declining home values have also kept many potential buyers on the sidelines and significantly cut into demand for second homes. Demand for adjustable rate mortgages has cooled considerably, despite a steeper yield curve, as reports about homeowners struggling with some ARM products circulate. Consumers are now opting for more traditional products. Applications for mortgage refinancing have fallen even more significantly, reflecting higher mortgage rates and tighter underwriting.
Mortgage Applications For Purchase8 Week Moving Average, Seasonally Adjusted
0
100
200
300
400
500
600
700
800
92 94 96 98 00 02 04 06 08
0
100
200
300
400
500
600
700
800Weekly Figure: May 30 @ 333.6Down From 352.7 on May 23Mort. Appl.: 8 Week Average: May 30 @ 359.78 Week Average Down 15.0% From Same Period Last Year
Highlights
Wachovia Economics Group 24
Figure 2Figure 3
Mortgage Applications For Refinancing4 Week Moving Average, Seasonally Adjusted
0
2,000
4,000
6,000
8,000
10,000
12,000
92 94 96 98 00 02 04 06 08
0
2,000
4,000
6,000
8,000
10,000
12,000Weekly Figure: May 30 @ 1496.1Down From 2013.5 on May 234 Week Average: May 30 @ 2035.64 Week Average Down 1.4% From Same Period Last Year
Mortgage Applications8 Week Moving Average, Seasonally Adjusted
0%
10%
20%
30%
40%
50%
60%
2005 2006 2007 2008
0%
10%
20%
30%
40%
50%
60%
ARMs Percent of Loan Applications (Value): May 30 @ 14.4%ARMs Percent of Loan Applications (Volume): May 30 @ 7.7%
Source: Mortgage Bankers Association and Wachovia Corp.
Homebuilders
Wachovia Economics Group 25
Homebuilders
Mortgage Rate Average Conventional 30-Year Commitment Rate
5%
6%
7%
8%
9%
10%
93 95 97 99 01 03 05 07
5%
6%
7%
8%
9%
10%
30-Yr Conventional Mortgage: May @ 6.04%
6.75 as of06/16/08
Wachovia Economics Group 26
Homebuilders
Payment on Median Priced Single Family HomeAs a Percentage of Family Income
16%
18%
20%
22%
24%
26%
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008
16%
18%
20%
22%
24%
26%
Payment as a Percent of Income: Apr @ 19.3%
Wachovia Economics Group 27
OFHEO Home Price Index
Home Prices Are Now Falling in the Majority of American Cities
OFHEO
Source: OFHEO and Wachovia Corp.
Wachovia
OFHEO Home Price IndexQ1-2008 vs. Q1-2007
Greater than 4.4%2.9% to 4.4%1.3% to 2.9%
-1.9% to 1.3%Less than -1.9%
Wachovia Economics Group 28
Non-Owner Occupied Purchase Loans: 2006
Investors Were Responsible For More than Half of the Purchases in Some Markets in 2006
Investor & Second-Home Mortgages
Non-Owner Occupied Purchase LoansPercent of Total Value of Purchase Loans
Greater than 25%15.0% to 25.0%10.0% to 15.0%
7.5% to 10.0%Less than 7.5%
Source: HMDA and Wachovia Corp.
Residential Real Estate Summary
Wachovia Economics Group 29
North Carolina
Wachovia Economics Group 30
North Carolina’s economy is still seeing solid employment gains, but the unemployment rate has moved higher in recent months.
Industrial development remains strong in most major metropolitan areas, particularly in technology and energy related ventures.
North Carolina has seen record population gains during the past two years, with the Charlotte and Raleigh-Durham regions leading the way.
New single-family activity has declined from cycle highs, as national builders have scaled back to bolster their balance sheets and reduce inventories.
Inventories of new homes are relatively lean in Charlotte and Raleigh, with total inventory in Charlotte at its lowest level in six years.
North Carolina Population GrowthIn Thousands
0
25
50
75
100
125
150
175
200
225
80 83 86 89 92 95 98 01 04 07
0
25
50
75
100
125
150
175
200
225
Highlights North Carolina MSA Unemployment RateSeasonally Adjusted
2%
3%
4%
5%
6%
7%
8%
90 92 94 96 98 00 02 04 06 08
2%
3%
4%
5%
6%
7%
8%
Unemployment Rate: Apr @ 5.4%
12-Month Moving Average: Apr @ 4.8%
North Carolina Housing PermitsThousands of Permits, Seasonally Adjusted Annual Rate
0
20
40
60
80
100
120
90 92 94 96 98 00 02 04 06 08
0
20
40
60
80
100
120Single-Family: Apr @ 47,676Single-Family, 12-Month Moving Avg.: Apr @ 57,657Multi-Family, 12-Month Moving Avg.: Apr @ 15,283
Employment & Income Growth Remain Solid
North Carolina
Source: Office of Federal Housing Enterprise Oversight, U.S. Department of Commerce, U.S. Department of Labor and Wachovia Corp.
North Carolina
Wachovia Economics Group 31
North Carolina
Highlights North Carolina Home PricesOFHEO Home Price Index
-2%
0%
2%
4%
6%
8%
10%
12%
90 92 94 96 98 00 02 04 06 08
-2%
0%
2%
4%
6%
8%
10%
12%Quarterly Change, Annual Rate: Q1 @ 3.4%
Year-over-Year Percent Change: Q1 @ 4.0%
•The state did not experience the same rapid price appreciation during the housing boom as was seen in some parts of the country. As a result, home prices are holding up relatively well and median prices are roughly in line with the national median.
Source: Office of Federal Housing Enterprise Oversight, U.S. Department of Commerce, U.S. Department of Labor and Wachovia Corp.
Wachovia Economics Group 32
Wilmington-Cape Fear HBA
Wilmington, NC
Our Economics Team
Wachovia Economics Group 33
Wachovia Economics Group
John E. Silvia, Ph.D.
Chief Economist (704) 374-7034 [email protected]
Mark Vitner Senior Economist (704) 383-5635 [email protected]
Jay H. Bryson, Ph.D.
Global Economist (704) 383-3518 [email protected]
Sam Bullard Economist (704) 383-7372 [email protected]
Anika Khan Economist (704) 715-0575 [email protected]
Azhar Iqbal Econometrician (704) 383-6805 [email protected]
Adam G. York Economic Analyst (704) 715-9660 [email protected]
Tim Quinlan Economic Analyst (704) 374-4407 [email protected]
I would like to thank our Wachovia Economics Group
Commentary http://www.wachovia.com/economicsemail
Wachovia Economics Group 34
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Wilmington-Cape Fear HBA