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

2. 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

3. 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%

4. 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%

5. 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%

6. 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

7. Office of the Chief Economist 6 House Price Declines Are Widespread and Severe in Some Markets from 2007Q2 to 2008Q2 Source: Freddie Mac -3.8 0.5 -3.4-15.9 -25.4 -3.8 RI –10.2 CT -4.7 DC -9.0 -5.7 -19.8 -4.1 0.1 -0.9 -4.4 -5.0 -2.7 0.7 -0.1 -0.8 -9.0 -10.2 -4.5 -12.8 -7.0 -3.9 1.3 -0.3 1.9 1.5 -1.1 -8.9 -6.6 -3.2 -24.8 -1.6 -5.1 3.0 -4.0 -3.1 -0.4 0.7 -0.9 0.9 -2.8 -8.4 -2.5 -2.8 -3.6 0.9 1.1 >= 0% -5 to 0% < -20% -10 to -5% -20 to -10% United States –9.5%

8. 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 2008 0.60-0.99% 1.00-1.39% 2.00-5.02% 1.40-1.69% 1.70-1.99% Source: Mortgage Bankers Association (National Delinquency Survey) 4.30% 5.02% 3.33%

9. 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%

10. 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; 1981-1983 DC: linear interpolation from 1980 to 1984; 1984-2007 DC: Housing Vacancy Survey ) Homeownership Rate (Percent) 2007: 68.1% 1993: 64% 2007: 47.2% 1993: 36%

11. Where to Get More Information Look for regular updates to our economic forecast, commentary and data at www.freddiemac.com/news/finance Contact us at chief_economist@freddiemac.com Opinions, estimates, forecasts and other views contained in this document are those of Freddie Mac's Office of the Chief Economist, do not necessarily represent the views of Freddie Mac or its management, should not be construed as indicating Freddie Mac's business prospects or expected results, and are subject to change without notice. Although the Office of the Chief Economist attempts to provide reliable, useful information, it does not guarantee that the information is accurate, current or suitable for any particular purpose. Information from this document may be used with proper attribution. Alteration of this document is prohibited. © 2008 by Freddie Mac.