Using Data to Track Local Housing Markets APDU Annual Conference Washington, DC September 24, 2008 Frank E. Nothaft Chief Economist

Office of the Chief Economist 1 Federal Government, National Trade Associations Offer A Lot of Local Data  Major Sources  Census: Housing Starts and Permits, Homeownership and Housing Vacancy  BLS: Unemployment rate, construction employment, CPI-rent  HUD: U.S. Housing Market Conditions  FHFA: House Price Indexes, Monthly Interest Rate Survey  Trade Associations  National Association or Realtors: Existing Home Sales  Mortgage Bankers Association: National Delinquency Survey

Office of the Chief Economist 2 Unemployment Rate, Payroll Employment Provide Local Labor Market Status Unemployment Rate (Percent) Source: U.S. Department of Labor (Bureau of Labor Statistics) – National Recession United States Washington-Baltimore- Northern Virginia, DC- MD-VA-WV Combined Statistical Area July: 4.3% Aug: 6.1%

Office of the Chief Economist 3 Employment Growth Weakest In Southwest Southeast and Great Lakes Areas National down 0.05% Maryland up 1.0% Washington DC up 2.3% Virginia up 0.5% -0.6% to -0.1% 0.0% to 0.4% Above 1.5% 0.5% to 1.3% Percent change in the non-farm payroll employment July 2007 through July 2008 Source: U.S. Bureau of Labor Statistics (Bureau of Labor Statistics) Below -1.0%

Office of the Chief Economist 4 Building Permits Measure Local Housing Construction Trends Source: U.S. Census Bureau – Recession Washington- Arlington- Alexandria, DC- VA-MD-WV MSA Housing Permits (Thousands) -69%

Office of the Chief Economist 5 Pre-Owned Are about 85% of House Sales Existing Home Sales Nationwide Down 32% Down more than 35% Down less than 20% Down 20-35% Percent change in existing home sales Second quarter 2005 through Second quarter 2008 Source: National Association of Realtors -53% -47% -36% -42% -35% DC: -44% -40% -37% -54% -40% -45% -40% -41% -44% 5% 0% -37% -38% Up

Office of the Chief Economist 6 House Price Declines Are Widespread and Severe in Some Markets from 2007Q2 to 2008Q2 Source: Freddie Mac RI –10.2 CT -4.7 DC >= 0% -5 to 0% < -20% -10 to -5% -20 to -10% United States –9.5%

Office of the Chief Economist 7 Prime Delinquencies Are Highest in Areas With Falling Home Values and Job Loss National = 2.35% Seriously Delinquent Washington, DC = 1.39% (90+ days delinquent or in foreclosure, Prime & Alt-A Conventional) Data as of June % % % % % Source: Mortgage Bankers Association (National Delinquency Survey) 4.30% 5.02% 3.33%

Office of the Chief Economist 8 In Virginia, Subprime Accounted for Over 50% of Foreclosures Since 2006 Number of Foreclosures Started in Virginia (Annualized Rate in Thousands) Source: Mortgage Bankers Association National Delinquency Survey (Data as of June 2008; number expanded to reflect 85% coverage) 32% 28% 37% 38% 48% 51% 27 % 28% 29% 32% 30% 32% 41% 40% 34% 30% 22% 17% 4K 8K 24K 22K 56% 37% 7% Subprime: 9% of Loans Serviced (June 2008) 57% 33% 10% 48% 45% 7%

Office of the Chief Economist 9 Rental Vacancy, Homeownership Rates Are Released by State and 75 Metro Areas Source: U.S. Census Bureau (1980 DC: 1980 decennial census; DC: linear interpolation from 1980 to 1984; DC: Housing Vacancy Survey ) Homeownership Rate (Percent) 2007: 68.1% 1993: 64% 2007: 47.2% 1993: 36%

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