MReport June 2022

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M REPORT | 59 O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST DATA Homeowner Equity Growth Lowers LTV Ratios Nationwide Lowered LTV ratios provide a non-distressed sale option to homeowners that can no longer afford their current property, while supply remains constrained for both distressed and non-distressed properties. H ome prices across the United States rose in Q1 at an annualized rate of 12.8%, accord- ing to Radian Home Price Index (HPI) data released by Red Bell Real Estate, LLC, a Radian Group Inc. company. The Radian HPI also rose 15.3% year over year (March 2020 to March 2021), slightly higher than the year-over-year increase of 15.2% recorded last month. "The first quarter saw a pullback from the record pace of home price appreciation wit- nessed in recent quarters," said Steve Gaenzler, SVP of Products, Data, and Analytics. "The cur- rent measure is still significantly higher than prior years, but new headwinds to affordability and supply are negatively impacting both the ability and willingness to purchase a home. And, while the refinance market is more sensi- tive to mortgage rate movements, there is little question that higher mortgage payments have started to impact homebuyer confidence as well. After slowing in appreciation rates in each of the prior five months, home price appreciation increased in March at a faster rate of 12.7% on an annualized basis, an acceleration of home price ap- preciation above the 11.8% annual- ized increase in the prior month. Nationally, the median estimated price for single-family and condo- minium homes rose to $316,872 in March from the $274,978 recorded in March 2021, marking a nearly $42,000 increase in the median home value nationally over the last 12 months. In Q1 of 2022, home prices rose an annualized 12.8%, representing a large decline from the 17% annu- alized increase during Q 4 of 2021, but remained far above the 9.4% annualized gain in Q1 of 2021. Supply remains constrained for both distressed and non-distressed properties. While most federal and state foreclosure moratoriums have been lifted, the number of distressed property listings remains near historic lows. This month the count of distressed listings represented just 4.3% of all listings, just slightly above the all- time low of 4.0% recorded a few months earlier. Strong homeowner equity growth over the last few years has pushed down loan-to-value ratios across the country, provid- ing a non-distressed sale option even to those homeowners that can no longer afford their current property. In general, the volume of ac- tive listings of properties for sale continues to remain at historically low levels In March, the U.S. had just over 770,000 active for-sale listings, slightly higher than the all-time low inventory reported two months ago. Also, last month reported just over 285,000 closed sales transactions, a number far below the 303,000 reported in March 2021. "In many markets, sales trans- actions are still closing quickly, and listing volumes remain low, but a moderation of home price appreciation rates relative to 2021 is a real possibility," Gaenzler said. However, compared to the absorption of listings due to sales, even at the lower sales counts, this represents a higher share of listings. Five years ago, the number of sales represented about 20% of total prior month active listings. Last month, the sales-to- listing ratio rose to 38%, suggesting that relative to the depressed vol- ume of listings, the market is still competitive, and buyers' choices remain limited. Last month, three regions—the South, Southwest, and West—re- ported faster appreciation rates than the prior month. In the first three months of 2021, all six regional indices recorded positive home price appreciation rates. Compared to Q 4 of 2021, all but one region recorded slower home price appreciation. The South region actually posted a faster annualized rate of appreciation in Q1 of this year than Q 4 of 2021. Strong sales continue to support these positive appreciation rates. Nationally, Q1 of 2022 recorded just under 730,000 total closed sales, slightly below the 750,000 record set in Q1 of 2021, and was still the sec- ond strongest Q1 on record. Likely impacted by seasonal declines in activity, home prices in the Northeast recorded the slowest rate of appreciation in the first quarter of the year. The South and Southwest were the strongest regions in the first quarter, with the South reporting an annualized Q1 appreciation rate of 21%. When eval- uated by price points, during the quarter, homes at all price points recorded positive appreciation. Similar to national numbers, listing activity region-by-region remains far below historic norms. Using the same five-year look- back, the index of regional listing volumes for all but one of our regions stands 40% to 55% lower than March 2017. One region, the Northeast, stood nearly 70% lower in active listings than our base- line. Listing volume remains tight in all regions. Metropolitan areas did quite well in the most recent quarter. All but two of the 20 larg- est metro areas—New York, Philadelphia—in the United States recorded faster positive price ap- preciation in Q1 when compared to Q 4 of 2021. On a monthly basis, all 20 metros posted faster price appreciation rates in March than in February. Not surprisingly, Days on Market (DOM) fell for listed properties in the United States and in the largest metropolitan areas. Nationally, DOM remained near all-time lows. In March, the average Days on Market for closed sales was 75 days. That level, while higher than the all-time low of 67 days, was actually lower than the 76-day monthly averages across all 12 months in 2021 and was more than a week shorter than any prior March on record.

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