1. 1 2007 Housing PULSE Survey Joe Molinaro Managing Director, Housing Opportunity Program Lora McCray Manager, Housing Opportunity Program

2. 2 Lack of affordable health care options Lack of available housing that is affordable Job Layoffs and unemployment A polluted environment Keeping Americans safe from terrorism In the big picture, affordable housing is a larger issue than jobs, crime, or the environment for adults in these larger MSAs. % Very Big Problem % Fairly Big Problem Now, thinking a bit about your area.... I am going to read you a list of problems that many areas are facing and I’d like you to tell me how big a problem each one is in your area....For each issue, I’d like you to tell me if that issue is a VERY BIG PROBLEM, A FAIRLY BIG PROBLEM, A MODERATE PROBLEM, A SLIGHT PROBLEM or NOT A PROBLEM AT ALL in your area..... Crime

3. 3 Despite some trepidation about the housing market, Americans remain convinced that buying a home is a good decision. They have not allowed temporary concerns to obscure their vision that home ownership is a solid long-term investment. Even in today’s market, 87% of people in these markets say buying a home is a good financial decision. This includes 90% of younger people, and 78% of renters. Nearly six out of ten (59%) say now is a good time to buy. This includes 57% of Americans ages 18-44.

4. 4

5. 5

6. 6 47% 51% 48% 28% 27% August 2003 April 2004 May 2005 October 2007 Total Problem Not A Problem While affordable housing is a major problem is these areas, there is not the sense the problem has gotten tremendously worse over the last couple years. Now, thinking a bit about your area.... I am going to read you a list of problems that many areas are facing and I’d like you to tell me how big a problem each one is in your area....For each issue, I’d like you to tell me if that issue is a VERY BIG PROBLEM, A FAIRLY BIG PROBLEM, A MODERATE PROBLEM, A SLIGHT PROBLEM or NOT A PROBLEM AT ALL in your area.... Lack of Available Affordable Housing +19% +23%+21%

7. 7 But, the problem is being felt most acutely in the nation’s priciest markets. Affordable Housing by Mean Value Now, thinking a bit about your area.... I am going to read you a list of problems that many areas are facing and I’d like you to tell me how big a problem each one is in your area....For each issue, I’d like you to tell me if that issue is a VERY BIG PROBLEM, A FAIRLY BIG PROBLEM, A MODERATE PROBLEM, A SLIGHT PROBLEM or NOT A PROBLEM AT ALL in your area..... 63% 40% 16% 33% House Value Above the CLL for the GSE’sHome Value Below the CLL for the GSE’s +47%+7% Total Problem Total Not a Problem (36%) (64%)

8. 8 Adults were asked: In general, do you believe buying a home is a good financial decision, or not? Do you believe now is a good time to buy a home, or not?

9. 9 Despite concerns about the market, people still believe that purchasing a home is a good financial decision. Is buying a home a good financial decision? % Total Good Decision Is now a good time to buy a home? % Total Yes

10. 10 Home Value Increasing (23%) Home Value Staying the Same (55%) Home Value Decreasing (22%) % Total Yes Even where home values are on the decline, people say now is a good time to buy a home. People have not lost faith in the housing market.

11. 11

12. 12 The survey asked a series of questions to determine the level of concern people have about the housing market in their area.

13. 13 % Total Concerned Home Value Above CLL for the GSE’s How concerned are you about the cost of housing in your area? Concern for Cost of Housing People’s level of concern about housing costs in their area remain consistent and significant. 77% 67% 66% 69% 32% 33% 30% August 2003 April 2004 May 2005 October 2007 Total Concerned Total Not Concerned +35%+33% +39% 81% 76% Home Value Below CLL for the GSE’s 65% 68% 65% Low Income High Income Low Income High Income

14. 14 In the last year in the area in which you live, do you feel that activity in the housing market has slowed down, increased, or stayed the same? People are very attuned to the slower pace of the housing market. Do you believe it is easier or harder to sell a house in your neighborhood today than it was a year ago? EASIER 8% HARDER 82%

15. 15 10% 14% 65% 57% 23% 28% Real Estate SalesReal Estate Values IncreaseRemain About the Same Decrease In the next three months, do you expect real estate sales in your neighborhood to increase, decrease, or remain the same? Roughly one-quarter of respondents believe home values and sales will continue to decrease. In the next three months, do you expect the value of homes in your neighborhood to increase, decrease, or remain about the same?

16. 16 Homeowners (72%) Renters (23%) % Home Purchase Good Decision 91%78% Total Yes Good Time To Buy 65%44% % Very Concerned About the Cost of Housing 65%82% Renters are a little more wary. Homeowners are more upbeat about the market.

17. 17 Respondents heard several statements about why some people are worried about the lack of affordable housing. They responded whether or not the statement qualified as one of their biggest worries, something they are only moderately worried about, something that was a small worry, or something they are not at all worried about.

18. 18 Nearly one quarter of respondents express concern over their home mortgage. I worry that the interest rate on my home mortgage is going to increase I worry that me, or members of my family, may have their home repossessed or foreclosed because we are unable to pay rising monthly mortgage payments. I worry that me, or members of my family, may have to sell their home and buy a less expensive home because we are unable to pay rising monthly mortgage payments. I am going to read several statements about why some people are worried about the lack of affordable housing and after I read each one, please tell me if, in your area, would you say the following is one of your biggest worries, something you are moderately worried about, just a small worry of yours, or something you are not worried about at all. % Total Big/Moderate Worry

19. 19 There are also significant concerns about affordability and the effect it has on the economy and country, in general. I worry that the cost of housing is getting so unaffordable that I will NEVER be able to buy a home and be part of the American Dream among renters. I am going to read several statements about why some people are worried about the lack of affordable housing and after I read each one, please tell me if, in your area, would you say the following is one of your biggest worries, something you are moderately worried about, just a small worry of yours, or something you are not worried about at all. I worry that my children, grandchildren or other family members will not be able to afford housing and live close to me. % Total Big/Moderate Worry I worry that the cost of a home is getting so unaffordable that it is hurting our local economy.

20. 20 % Total Big/Moderate Worry among those markets ABOVE the $417,000 C L Limit for the GSE’s % Total Big/Moderate Worry among those markets BELOW the $417,000 C L Limit for the GSE’s I am going to read several statements about why some people are worried about the lack of affordable housing and after I read each one, please tell me if, in your area, would you say the following is one of your biggest worries, something you are moderately worried about, just a small worry of yours, or something you are not worried about at all. I worry that my children, grandchildren or other family members will not be able to afford housing and live close to me. I worry that the cost of housing is getting so unaffordable that I will NEVER be able to buy a home and be part of the American Dream among renters. The highest market value markets are different on two key attributes.

21. 21

22. 22 Having enough money for a down payment and closing costs; Being able to find a home they like that they can afford; Having enough confidence in their job security; Having enough confidence that they would be approved for a home mortgage; and, Facing discrimination that might prevent someone from buying the home they would want to buy. Since 2003, we have been testing a series of “obstacles” to home ownership:

23. 23 74% 70% 72% 56% 29% 83% 73% 68% 63% 24% Enough money for down payment Finding a home affordable and liked Confidence in job security Confidence in mortgage approval Facing Discrimination People ARE more concerned today about having the money to pay for a down payment or to be approved for a home mortgage than at any time in our years of tracking. Now, thinking still about issues that affect housing for both renters and homeowners... I am going read several things some people have said makes housing too expensive and unaffordable After I read each one, please tell me what you think – is that a huge obstacle for people in your area, a medium-size obstacle, a small obstacle, or not an obstacle at all that makes housing unaffordable for people in your area. By Obstacles 2003 2007

24. 24

25. 25 How difficult is it for people to obtain a fair and affordable mortgage on their homes in the area in which you live...is it very difficult, somewhat difficult, not very difficult, or not at all difficult? There is considerable anxiety that people will have trouble getting a fair and affordable mortgage. Thinking about the housing market in which you live… How difficult is it to obtain a fair and affordable mortgage on the homes in the area in which you live? Difficult Overall Total Difficult in Home Value Below the CLL for the GHE’s Total Difficult in Home Value Above the CLL for the GSE’s

26. 26 29% 36% 50% Value Increasing (23%) Value Same (55%) Value Decreasing (22%) Total Very Big/ Moderate Problem Foreclosures are a recognized problem. By Changes In Market Value How big of a problem are foreclosures on homes in your area...are they a very big problem, a moderate problem, a slight problem, or not a problem at all? 38% of those surveyed say foreclosures are a big or moderate problem in their area.

27. 27 25% 29% 45% Value Increasing (23%) Value Same (55%) Value Decreasing (22%) Total More One-third of people interviewed say the rate of foreclosures has increased in their area in the last year. Hardest hit are areas where home values are dropping. How big of a problem are foreclosures on homes in your area...are they a very big problem, a moderate problem, a slight problem, or not a problem at all? 32% of those surveyed say the rate of foreclosures in their area have increased over the past year. By Changes In Market Value

28. 28 Less than $60k (37%) $60-$100k (25%) More than $100k (24%) % Very Difficult to get mortgage 64%59%51% % Foreclosure Problem 44%42%30% % More Foreclosures 27%37%35% By Annual Income Lower income respondents sense an increasing difficulty in getting a mortgage right now. Concern about foreclosures do not vary widely by income.

29. 29 Over one in five (23%) of our survey respondents has some kind of variable rate mortgage… INTEREST ONLY ADJUSTABLE RATE BALLOON OR OTHER LARGE PAYMENT DUE IN NEXT FIVE YEARS

30. 30 These variable rates do cause a bit more strain for people. And how much of a financial strain on your budget is paying your rent or mortgage each month... is it significant strain, a slight strain, not much of a strain, or no strain at all? Overall and By Mortgage Type 45% 51% 46% 47% 49% 53% Overall Variable Rate Mortgage (22%) Fixed (23%) -2%+2%-7% Total Significant/ Slight Strain Total Not Much/ No Strain

31. 31 And how worried are you that you will have difficulty making your mortgage payments over the next year.....would you say you are very worried, fairly worried, only a little worried, or not at all worried? Overall Making their payments has these folks just slightly more worried. 10% Skip Base Overall Among Total Very/ Fairly Worried Respondents Who Pay A Mortgage 14% 7% Total Yes, Variable Rate MortgageNo, Fixed Rate Mortgage By Mortgage Type

32. 32 We asked people: When it comes to issues and questions being raised about the practices regarding loans and mortgages in the housing market, do you feel that federal government should take a more active oversight role in this area or should the oversight be done by the lending companies and associations that oversee their businesses?

33. 33 Ideology comes into play on the proper role of government as the country is divided on this question. 63% 45% 37% 30% 47% 55% Total GOP Total Independent Total Democrat Total Companies Tota l Government +33%-2%-18% By Party/Ideology When it comes to the issues and questions being raised about the practices regarding loans and mortgages in the housing market, do you feel the federal government should take a more active oversight role in this area or should the oversight be done by the lending companies and associations that oversee their businesses? And if you had to say one way or the other, would you lean toward the federal government taking a more active role or would you lean toward lending companies and associations overseeing their businesses? Overall -2% 45% 47% (27%) (42%)(21%) Total Companies Total Government

34. 34 Despite some trepidation about the housing market, Americans remain convinced that buying a home is a good decision. They have not allowed temporary concerns to obscure their vision that home ownership is a solid long-term investment. Even in today’s market, 87% of people in these markets say buying a home is a good financial decision. This includes 90% of younger people, and 78% of renters. Nearly six out of ten (59%) say now is a good time to buy. This includes 57% of Americans ages 18-44.

35. 35 Survey was conducted for the National Association of Realtors by Public Opinion Strategies. It surveyed 1,000 adults from the Top 25 Metropolitan Statistical Areas (MSA’s). The survey was conducted October 21-24, 2007 and has a margin of error of + 3.10%.

36. 36 Atlanta, GA Baltimore, MD Boston, MA Chicago, IL Cleveland, OH Dallas, TX Denver, CO Detroit, MI Houston, TX Los Angeles, CA Miami, FL Minneapolis, MN New York, NY Philadelphia, PA Phoenix, AZ Pittsburgh, PA Portland, OR Riverside, CA Sacramento, CA San Francisco, CA St. Louis, MO San Diego, CA Seattle, WA Tampa, FL Washington, DC The Top 25 Metropolitan Statistical Areas used in this survey include:

37. 37 We compared median home prices in the second quarter of 2007. The markets above the $417,000 Conforming Loan Limit for the GSE’s are: The markets that are below this amount are: Washington, DC San Francisco, CA San Diego, CA New York, NY Boston, MA Riverside, CA Seattle, WA Miami, FL Sacramento, CA Portland, OR Baltimore, MD Chicago, IL Phoenix, AZ Denver, CO Philadelphia, PA Minneapolis, MN Tampa, FL Atlanta, GA Saint Louis, MO Dallas, TX Houston, TX Detroit, MI Cleveland, OH Pittsburgh, PA Los Angeles, CA

38. 38 Markets Where Prices Decreased (0% to -7%) Markets Where Prices Increased (2% to 9%) Markets Where Prices Stayed Generally the Same (0% to 2% Increase Only) Miami, FL Saint Louis, MO Pittsburgh, PA Baltimore, MD Philadelphia, PA Portland, OR San Francisco, CA Seattle, WA Detroit, MI Cleveland, OH Sacramento, CA Tampa, FL Phoenix, AZ Minneapolis, MN Boston, MA Riverside, CA Denver, CO San Diego, CA Washington, DC New York, NY Atlanta, GA Los Angeles, CA Houston, TX Chicago, IL Dallas, TX Based on change in median home price from Q2 2006 to Q2 2007