austin-round rock area...note: limits are current and include the changes made in december 2016....
TRANSCRIPT
![Page 1: Austin-Round Rock Area...Note: limits are current and include the changes made in December 2016. $49,400 7-year (28 quarters) Housing Equity Gain* $108,400 Prices are up from a year](https://reader030.vdocuments.us/reader030/viewer/2022040414/5f232862358b762913258f37/html5/thumbnails/1.jpg)
Local Price Trends
The Austin-Round Rock market is part of region 10 in the NAR governance system, which includes all of Louisiana and Texas. The 2018 NAR Regional Vice President representing region 10 is Scott Kesner.
Local NAR Leadership
Note: limits are current and include the changes made in December 2016.
$49,4007-year (28 quarters) Housing Equity Gain*
$108,400
Prices are up from a year ago, but price growth is slowing
Austin U.S.
$38,933
3-year (12-quarter) Appreciation (2017 Q4)5.4%
$102,900
18.8%3-year (12-quarter) Housing Equity Gain*
9-year (36 quarters) Housing Equity Gain*
Most buyers in this market have access to government-backed financing$361,100
U.S.
FHA Loan Limit
Price Activity$246,567$293,200
AustinCurrent Median Home Price (2017 Q4)
$636,150Local Median to Conforming Limit Ratio
$424,100
not comparable
$76,700
$636,150
1-year (4-quarter) Appreciation (2017 Q4) 1.9%
Local Trend
*Note: Equity gain reflects price appreciation only
Gains in the last 3 years have extended the trend of positive price growth after the
recession$65,800
69%
Conforming Loan Limit**
Austin-Round Rock AreaLocal Market Report, Fourth Quarter 2017
Today's Market…
20.3%
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
2017Q4
Q22016Q4
Q22015Q4
Q22014Q4
Q22013Q4
Q22012Q4
Q22011Q4
Q22010Q4
Q22009Q4
Q22008Q4
Median Price (Red Line) and One-year Price Growth
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Benefits of Ownership: Total Equity Appreciation
Price Activity Austin U.S.$10,361 $16,506
Total Equity Gained** through 2017 Q4 from quarter in which home was of purchasedLocal Trend
$49,3893-year (12-quarter)* $61,677
Price appreciation and principle payments in the last 3 years have boosted total equity
growth since the recession
*Note: Equity gain reflects price and principle payments since purchase, prevailing 30-year fixed rate mortgage at time of purchase and a 10% downpayment. Downpayment is not included in total equity
$77,560$35,924If purchase in 2005, the national price peak $157,438
$132,990
$109,5665-year (20-quarter)* $79,3677-year (28 quarters)* $125,685 $87,751
1-year (4-quarter)
9-year (36 quarters)*
$10,361
$124,924
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
$180,000
$200,000
2016 Q42014 Q42012 Q42010 Q42008 Q42006 Q42004 Q4
Total Equity Accrued to Owner by Year and Quarter of Purchase
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Natural Resourc 5.9% 61.8 Natural R5.1%
#N/A #N/A #N/A #N/A
#N/A #N/A #N/A #N/A
Manufacturing 5.5% 57.7 Manufac 8.5%
Trade/Transporta 17.3% 181 Trade/Tr 18.6%
Information 2.9% 30.6 Informa1.9%
Financial Activ 5.8% 60.8 Financia5.8%
Prof. & Busine 17.4% 181.4 Professi13.9%
Educ. & Healt 11.6% 121 Educatio16.1%
Leisure & Hos 12.0% 125.9 Leisure 10.6%Other Services 4.4% 45.8 Other S 3.9%
Government 17.1% 179.2 94.1% Governm15.5% 100.0%#N/A #N/A #N/A #N/A#N/A #N/A #N/A #N/A
Financial Activities Prof. & Business Services Educ. & Health Services Leisure & Hospitality
Service Providing Excluding Government
1,700
Trade/Transportation/Utilities
Employment has held up and is on an upward trend
3,20011,700
6,200
12-month change (2017 - Dec)
36-month change (2017 - Dec) 9.1%NA
4.0%
Not Comparable
12-month Employment Change by Industry in the Austin-Round Rock Area (Dec - 2017)
1,100
-2,400
U.S.Texas
NA Natural Resources and Mining Natural Resources/Mining/Construction
NA
Share of Total Employment by Industry
Information
Other Services
Government
Drivers of Local Supply and Demand…
U.S.
State Economic Activity Index
Construction
1,300
4.1%
4.7%3.3%
Austin-Round Rock Area
Goods Producing
1,800 Manufacturing
4,500
Local employment growth is strong compared to other markets
2.7%
3.2%
Current Unemployment Rate (Dec)
2.7%
Local Economic Outlook Austin U.S.
107,800
33,800
Not Comparable
Unemployment in Austin is better than the national average and improving
Not Comparable
32,900
36-month Job Change (Dec)
The economy of Texas has outpaced the rest of the nation and improved modestly
from last month's 4.00% change
12-month Job Change (Dec)
3,800
NA
NA
12-month Job Change (Nov)
Year-ago Unemployment Rate 1.6%1-year (12 month) Job Growth Rate
Natural Resources/Mining/Constru
ct5.9%
Manufacturing
5.5%
Trade/Transportation/Utilit
ies17.3%
Information2.9%
Financial Activities
5.8%Prof. &
Business Services17.4%
Educ. & Health
Services11.6%
Leisure & Hospitality
12.0%
Other Services
4.4%
Government17.1%
Natural Resources/
Mining/Construct5.1%
Manufacturing
8.5%
Trade/Transportation/Uti
lities18.6%
Information1.9%Financial
Activities5.8%
Professional & Business
Services13.9%
Educational & Health Services16.1%
Leisure & Hospitality
10.6%
Other Services
3.9%
Government15.5%
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12.1%
9,793 Production above trend for an extended
period of time could cause prices to moderate as inventory is built up.
U.S.New Housing Construction
Single-Family Housing Permits (Dec) 12-month sum vs. a year ago 9.7%
not comparable
12-month Sum of 1-unit Building Permits through Dec 15,291
Austin
not comparable
8-year average for 12-month Sum of 1-Unit Building Permits
While new construction is the traditional driver of supply in real estate, foreclosures and short-sales now have a strong impact on inventories, particularly at the local level. Rising inventories, through construction or distressed sales, place downward pressure on the median home prices.
Local Fundamentals
The current level of construction is 56.1% above the long-term average
Construction is on the rise relative to last year, suggesting that the local inventory has
stabilized
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
State Total Foreclosure Rate vs. U.S Average(U.S. Average in Blue Dashed Line)
Source: Mortgage Bankers' Association
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
Construction: 12-month Sum of Local Housing Permits (Historical Average Shown in Red Dashed Line)
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Monthly Mortgage Payment to Income
Affordable compared to most marketsHistorical Average 1.8
U.S.
Historical Average More affordable than most markets18.9%12.1%
Affordability
11.9%
U.S.
Ratio for 2017 Q4
Ratio for 2017
Ratio for 2017 Q4Ratio for 2017
15.3%Historically strong and an improvement
over the third quarter of 201716.0%
2.8
Austin
Austin
Median Home Price to Income
12.1%
2.12.1
2.72.7
The price-to-income ratio eased, but could be better
0%
5%
10%
15%
20%
25%
30%
2017201520132011200920072005200320011999
Long-Term Trend: Ratio of Local Mortgage Servicing Cost to Income (Local Historical Average Shown in Red, U.S. Average in Green)
0%
2%
4%
6%
8%
10%
12%
14%
2017 Q42017 Q32017 Q22017 Q12016 Q42016 Q32016 Q22016 Q1
Recent Trend - Local Mortgage Servicing Cost to Income(Historical Average Shown in Red Dashed Line)
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In the last quarter of 2017 the economic momentum in the U.S. continued with positive GDP growth, low unemployment rates and expanding private consumption. In an environment of improving economic conditions, the government’s 10-year Treasury note rose to 2.4 percent in Q4 2017 from 2.2 in Q3 2017. As a result, Freddie Mac published that the average interest rate on a 30-year conventional home loan was 3.92 percent in Q4 2017 from 3.89 percent in Q3 2017. Mortgage rates still hover in the historically low range. Homebuyers have excellent purchasing power at current mortgage rates, and while it may make sense for fewer households to refinance, there are still some households that can save cash with a refinance. Looking ahead, NAR is forecasting the 30-year fixed rate mortgage to average 4.4 percent for 2018 and 4.9 percent for 2019, respectively.
The Mortgage Market
0
40
80
120
160
200
240
280
0.0%0.5%1.0%1.5%2.0%2.5%3.0%3.5%4.0%4.5%5.0%
2017 Q4Q22016 Q4Q22015 Q4Q22014 Q4Q22013 Q4Q22012 Q4
30-year Fixed Mortgage Rate and Treasury Bond Yield
Spread (left axis) 30-Year FRM (Right axis)
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
2017201520132011200920072005200320011999
Ratio of Local Median Home Price to Local Average Income (Local Historical Average Shown in Red, U.S. Average in Green)
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REALTOR® Price Expectations
Texas U.S.
2017 - Dec 3.0% 3.1%REALTORS® expect weaker price growth
in Texas than in the U.S. in the next 12 months. Their price expectations for the
local market are more modest than a year ago.Prior 12 months 3.3% 2.8%
REALTOR® Price Expectations
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
REALTOR® Price Expectations for the Next 12 Months(U.S. Average in Blue Dashed Line)
Source: NAR
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More information on the OMB's geographic definitions can be found at https://obamawhitehouse.archives.gov/omb/bulletins_default/
Bastrop County, Caldwell County, Hays County, Travis County, and Williamson County
The Austin area referred to in this report covers the geographic area of the Austin-Round Rock metro area as officially defined by the Office of Management and Budget of the U.S. Government. The official coverage area includes the following counties:
Geographic Coverage for this Report
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Local Price Trends
The Austin-Round Rock market is part of region 10 in the NAR governance system, which includes all of Louisiana and Texas. The 2017 NAR Regional Vice President representing region 10 is Leslie Rouda Smith.
Local NAR Leadership
Note: limits are current and include the changes made in December 2016.
$60,4007-year (28 quarters) Housing Equity Gain*
$101,900
Prices are up from a year ago, but price growth is slowing
Austin U.S.
$39,700
3-year (12-quarter) Appreciation (2017 Q1)6.9%
$103,900
20.8%3-year (12-quarter) Housing Equity Gain*
9-year (36 quarters) Housing Equity Gain*
Most buyers in this market have access to government-backed financing$361,100
U.S.
FHA Loan Limit
Price Activity$230,700$286,400
AustinCurrent Median Home Price (2017 Q1)
$636,150Local Median to Conforming Limit Ratio
$424,100
not comparable
$64,333
$636,150
1-year (4-quarter) Appreciation (2017 Q1) 6.2%
Local Trend
*Note: Equity gain reflects price appreciation only
Gains in the last 3 years have extended the trend of positive price growth after the
recession$32,167
68%
Conforming Loan Limit**
Austin-Round Rock AreaLocal Market Report, First Quarter 2017
Today's Market…
26.7%
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
2017Q1
Q32016Q1
Q32015Q1
Q32014Q1
Q32013Q1
Q32012Q1
Q32011Q1
Q32010Q1
Q32009Q1
Q32008Q1
Median Price (Red Line) and One-year Price Growth
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Benefits of Ownership: Total Equity Appreciation
Price Activity Austin U.S.$21,219 $18,582
Total Equity Gained** through 2017 Q1 from quarter in which home was of purchasedLocal Trend
$48,7433-year (12-quarter)* $71,100
Price appreciation and principle payments in the last 3 years have boosted total equity
growth since the recession
*Note: Equity gain reflects price and principle payments since purchase, prevailing 30-year fixed rate mortgage at time of purchase and a 10% downpayment. Downpayment is not included in total equity
$46,748$45,884If purchase in 2005, the national price peak $162,751
$126,417
$110,0085-year (20-quarter)* $83,9967-year (28 quarters)* $124,038 $76,553
1-year (4-quarter)
9-year (36 quarters)*
$21,219
$115,925
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
$180,000
$200,000
2016 Q12014 Q12012 Q12010 Q12008 Q12006 Q12004 Q1
Total Equity Accrued to Owner by Year and Quarter of Purchase
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Natural Resourc 6.0% 60.9 Natural R5.2%
#N/A #N/A #N/A #N/A
#N/A #N/A #N/A #N/A
Manufacturing 5.6% 57.1 Manufac 8.4%
Trade/Transporta 16.8% 171.9 Trade/Tr 18.6%
Information 2.8% 28.1 Informa1.9%
Financial Activ 5.5% 56.6 Financia5.7%
Prof. & Busine 16.8% 171.4 Professi14.1%
Educ. & Healt 11.9% 121.5 Educatio15.8%
Leisure & Hos 12.2% 124.8 Leisure 11.0%Other Services 4.4% 44.7 Other S 3.9%
Government 18.0% 183.6 94.0% Governm15.4% 100.0%#N/A #N/A #N/A #N/A#N/A #N/A #N/A #N/A
Financial Activities Prof. & Business Services Educ. & Health Services Leisure & Hospitality
Service Providing Excluding Government
400
Trade/Transportation/Utilities
Employment growth has eased, but remains positive
9005,100
5,000
12-month change (2017 - Apr)
36-month change (2017 - Apr) 9.9%10.5%
3.1%
Not Comparable
12-month Employment Change by Industry in the Austin-Round Rock Area (Mar - 2017)
2,200
3,100
U.S.Texas
NA Natural Resources and Mining Natural Resources/Mining/Construction
NA
Share of Total Employment by Industry
Information
Other Services
Government
Drivers of Local Supply and Demand…
U.S.
State Economic Activity Index
Construction
3,400
4.4%
5.0%2.9%
Austin-Round Rock Area
Goods Producing
1,900 Manufacturing
3,400
Local employment growth is strong compared to other markets
3.2%
2.9%
Current Unemployment Rate (Apr)
3.0%
Local Economic Outlook Austin U.S.
106,100
28,900
Not Comparable
Unemployment has risen since the same period last year, but Austin's labor market has been more resilient than the national
average
Not Comparable
31,900
36-month Job Change (Apr)
Texas's economy is stronger than the nation's, but slowed from last month's
3.15% change
12-month Job Change (Apr)
6,500
NA
NA
12-month Job Change (Mar)
Year-ago Unemployment Rate 1.6%1-year (12 month) Job Growth Rate
Natural Resources/Mining/Constru
ct6.0%
Manufacturing
5.6%
Trade/Transportation/Utilit
ies16.8%
Information2.8%
Financial Activities
5.5%Prof. &
Business Services16.8%
Educ. & Health
Services11.9%
Leisure & Hospitality
12.2%
Other Services
4.4%
Government18.0%
Natural Resources/
Mining/Construct5.2%
Manufacturing
8.4%
Trade/Transportation/Uti
lities18.6%
Information1.9%Financial
Activities5.7%
Professional & Business
Services14.1%
Educational & Health Services15.8%
Leisure & Hospitality
11.0%
Other Services
3.9%
Government15.4%
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19.4%
9,011 Production above trend for an extended
period of time could cause prices to moderate as inventory is built up.
U.S.New Housing Construction
Single-Family Housing Permits (Apr 2017) 12-month sum vs. a year ago 8.4%
not comparable
12-month Sum of 1-unit Building Permits through Apr 2017 14,516
Austin
not comparable
8-year average for 12-month Sum of 1-Unit Building Permits
While new construction is the traditional driver of supply in real estate, foreclosures and short-sales now have a strong impact on inventories, particularly at the local level. Rising inventories, through construction or distressed sales, place downward pressure on the median home prices.
Local Fundamentals
The current level of construction is 61.1% above the long-term average
Construction is on the rise relative to last year, suggesting that the local inventory has
stabilized
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
State Total Foreclosure Rate vs. U.S Average(U.S. Average in Blue Dashed Line)
Source: Mortgage Bankers' Association
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
Construction: 12-month Sum of Local Housing Permits (Historical Average Shown in Red Dashed Line)
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Monthly Mortgage Payment to Income
Affordable compared to most marketsHistorical Average 1.8
U.S.
Historical Average More affordable than most markets19.2%12.1%
Affordability
12.0%
U.S.
Ratio for 2017 Q1
Ratio for 2016
Ratio for 2017 Q1Ratio for 2016
15.6%Historically strong, but weaker than the
fourth quarter of 201615.2%
2.8
Austin
Austin
Median Home Price to Income
11.2%
2.02.1
2.72.7
The price-to-income ratio eased, but could be better
0%
5%
10%
15%
20%
25%
30%
2016201420122010200820062004200220001998
Long-Term Trend: Ratio of Local Mortgage Servicing Cost to Income (Local Historical Average Shown in Red, U.S. Average in Green)
0%
2%
4%
6%
8%
10%
12%
14%
2017 Q12016 Q42016 Q32016 Q22016 Q12015 Q42015 Q32015 Q2
Recent Trend - Local Mortgage Servicing Cost to Income(Historical Average Shown in Red Dashed Line)
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The first quarter was marked by rising mortgage rates. Short- and long- term U.S. interest rates continued to increase after November’s elections. The Fed raised the federal fund in March, bringing the target from 0.75 percent to 1.00 percent while Freddie Mac published that the average interest rate on a 30-year conventional home loan was 4.2 percent in Q1 2017 from 3.8 percent in Q4 2016. Intermediate-term yields also increased during the quarter, with the 10-year U.S. Treasury closing at 2.4 percent. Although the Fed does not directly set mortgage rates, its actions can affect the housing market. Mortgage rates tend to move with the government’s 10-year Treasury note, which serves as a benchmark for mortgage rates. However, homebuyers should bear in mind that mortgage rates still hover in the historically low range. Homebuyers have excellent purchasing power at these mortgage rates, and while it may make sense for fewer households to refinance, there are still some households that can save cash with a refinance. Looking ahead, despite the recent decline in April, interest rates are likely to head higher in 2017. NAR is forecasting the 30-year fixed rate mortgage to average 4.3 percent for 2017.
The Mortgage Market
0
40
80
120
160
200
240
280
0.0%0.5%1.0%1.5%2.0%2.5%3.0%3.5%4.0%4.5%5.0%
2017 Q1Q32016 Q1Q32015 Q1Q32014 Q1Q32013 Q1Q32012 Q1
30-year Fixed Mortgage Rate and Treasury Bond Yield
Spread (left axis) 30-Year FRM (Right axis)
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
2016201420122010200820062004200220001998
Ratio of Local Median Home Price to Local Average Income (Local Historical Average Shown in Red, U.S. Average in Green)
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REALTOR® Price Expectations
Texas U.S.
2017 - Apr 3.8% 4.2% REALTORS® expect weaker price growth in Texas than in the U.S. in the next 12
months although their local expectations are higher than a year ago.Prior 12 months 3.7% 3.8%
REALTOR® Price Expectations
0.0%0.5%1.0%1.5%2.0%2.5%3.0%3.5%4.0%4.5%5.0%
REALTOR® Price Expectations for the Next 12 Months(U.S. Average in Blue Dashed Line)
Source: NAR
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More information on the OMB's geographic definitions can be found at https://obamawhitehouse.archives.gov/omb/bulletins_default/
Bastrop County, Caldwell County, Hays County, Travis County, and Williamson County
The Austin area referred to in this report covers the geographic area of the Austin-Round Rock metro area as officially defined by the Office of Management and Budget of the U.S. Government. The official coverage area includes the following counties:
Geographic Coverage for this Report
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Local Price Trends
The Austin-Round Rock market is part of region 10 in the NAR governance system, which includes all of Louisiana and Texas. The 2016 NAR Regional Vice President representing region 10 is Matthew Ritchie.
Local NAR Leadership
Note: limits are current and include the changes made in November of 2012 and extended in November of 2013
$59,000
7-year (28 quarters) Housing Equity Gain*
$95,800
Prices continue to grow relative to last year
Austin U.S.
$32,267
3-year (12-quarter) Appreciation (2016 Q3)5.2%
$94,900
15.6%
3-year (12-quarter) Housing Equity Gain*
9-year (36 quarters) Housing Equity Gain*
Most buyers in this market have access to government-backed financing
$331,200
U.S.
FHA Loan Limit
Price Activity
$239,133$284,000
Austin
Current Median Home Price (2016 Q3)
$625,500Local Median to Conforming Limit Ratio
$417,000
not comparable
$60,900
$625,500
1-year (4-quarter) Appreciation (2016 Q3) 7.7%
Local Trend
*Note: Equity gain reflects price appreciation only
Gains in the last 3 years have extended the trend of positive price growth after the
recession$17,967
68%
Conforming Loan Limit**
Austin-Round Rock AreaLocal Market Report, Third Quarter 2016
Today's Market…
26.2%
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
2016Q3
Q12015Q3
Q12014Q3
Q12013Q3
Q12012Q3
Q12011Q3
Q12010Q3
Q12009Q3
Q12008Q3
Q12007Q3
Median Price (Red Line) and One-year Price Growth
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Benefits of Ownership: Total Equity Appreciation
Price Activity Austin U.S.
$24,567 $15,479
Total Equity Gained** through 2016 Q3 from quarter in which home was of purchased
Local Trend
$41,9323-year (12-quarter)* $69,513
Price appreciation and principle payments in the last 3 years have boosted total equity
growth since the recession
*Note: Equity gain reflects price and principle payments since purchase, prevailing 30-year fixed rate mortgage at time of purchase and a 10% downpayment. Downpayment is not included in total equity
$34,098
$28,103If purchase in 2005, the national price peak $146,221
$118,649
$105,2815-year (20-quarter)* $82,243
7-year (28 quarters)* $115,299 $73,900
1-year (4-quarter)
9-year (36 quarters)*
$24,567
$99,470
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
$180,000
2015 Q32013 Q32011 Q32009 Q32007 Q32005 Q32003 Q3
Total Equity Accrued to Owner by Year and Quarter of Purchase
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Natural Resourc 6.1% 60.8 Natural R5.2%
#N/A #N/A #N/A #N/A
#N/A #N/A #N/A #N/A
Manufacturing 5.4% 53.7 Manufac 8.4%
Trade/Transporta 17.4% 172.5 Trade/Tr 18.8%
Information 2.8% 27.7 Informa1.9%
Financial Activ 5.8% 57.1 Financia5.7%
Prof. & Busine 17.0% 169.1 Professi14.1%
Educ. & Healt 11.6% 115.6 Educatio15.8%
Leisure & Hos 12.2% 121.3 Leisure 10.6%Other Services 4.3% 42.6 Other S 3.9%
Government 17.4% 172.6 93.9% Governm15.5% 100.0%
#N/A #N/A #N/A #N/A
#N/A #N/A #N/A #N/A
Financial Activities
Prof. & Business Services
Educ. & Health Services
Leisure & Hospitality
Service Providing Excluding Government
500
Trade/Transportation/Utilities
Employment growth has eased, but remains positive
3,200
6,000
4,200
12-month change (2016 - Sep)
36-month change (2016 - Sep)10.0%12.0%
2.6%
Not Comparable
12-month Employment Change by Industry in the Austin-Round Rock Area (Sep - 2016)
1,600
3,000
U.S.Texas
NA
Natural Resources and Mining
Natural Resources/Mining/Construction
NA
Share of Total Employment by Industry
Information
Other Services
Government
Drivers of Local Supply and Demand…
U.S.
State Economic Activity Index
Construction
4,800
5.0%
5.1%
3.0%
Austin-Round Rock Area
Goods Producing
-4,000 Manufacturing
6,700
Local employment growth is strong compared to other markets
3.5%
3.3%
Current Unemployment Rate (Sep)
2.9%
Local Economic Outlook Austin U.S.
108,300
28,600
Not Comparable
Unemployment has risen since the same period last year, but Austin's labor market has been more resilient than the national
average
Not Comparable
32,000
36-month Job Change (Sep)
The economy of Texas is growing more slowly than the rest of the nation, but improved modestly from last month's
2.52% change
12-month Job Change (Sep)
2,600
NA
NA
12-month Job Change (Aug)
Year-ago Unemployment Rate
1.8%1-year (12 month) Job Growth Rate
Natural Resources/Mining/Constru
ct6.1%
Manufacturing
5.4%
Trade/Transportation/Utilit
ies17.4%
Information2.8%
Financial Activities
5.8%Prof. & Business Services17.0%
Educ. & Health
Services11.6%
Leisure & Hospitality
12.2%
Other Services
4.3%
Government17.4%
Natural Resources/
Mining/Construct5.2%
Manufacturing
8.4%
Trade/Transportation/Uti
lities18.8%
Information1.9%Financial
Activities5.7%
Professional & Business
Services14.1%
Educational & Health Services15.8%
Leisure & Hospitality
10.6%
Other Services
3.9%
Government15.5%
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14.6%
8,565 Production above trend for an extended
period of time could cause prices to moderate as inventory is built up.
U.S.
New Housing Construction
Single-Family Housing Permits (Sep 2016) 12-month sum vs. a year ago
9.5%
not comparable
12-month Sum of 1-unit Building Permits through Sep 2016
13,140
Austin
not comparable
8-year average for 12-month Sum of 1-Unit Building Permits
While new construction is the traditional driver of supply in real estate, foreclosures and short-sales now have a strong impact on inventories, particularly at the local level. Rising inventories, through construction or distressed sales, place downward pressure on the median home prices.
Local Fundamentals
The current level of construction is 53.4% above the long-term average
Construction is on the rise relative to last year, suggesting that the local inventory has
stabilized
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
State Total Foreclosure Rate vs. U.S Average(U.S. Average in Blue Dashed Line)
Source: Mortgage Bankers' Association
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
Construction: 12-month Sum of Local Housing Permits (Historical Average Shown in Red Dashed Line)
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Monthly Mortgage Payment to Income
Affordable compared to most marketsHistorical Average 1.8
U.S.
Historical Average More affordable than most markets19.5%12.4%
Affordability
11.9%
U.S.
Ratio for 2016 Q3
Ratio for 2015
Ratio for 2016 Q3
Ratio for 2015
15.5%
Historically strong and an improvement over the second quarter of 2016
15.6%
2.8
Austin
Austin
Median Home Price to Income
11.6%
2.1
2.2
2.7
2.9
The price-to-income ratio eased, but could be better
0%
5%
10%
15%
20%
25%
30%
2015201320112009200720052003200119991997
Long-Term Trend: Ratio of Local Mortgage Servicing Cost to Income (Local Historical Average Shown in Red, U.S. Average in Green)
0%
2%
4%
6%
8%
10%
12%
14%
2016 Q32016 Q22016 Q12015 Q42015 Q32015 Q22015 Q12014 Q4
Recent Trend - Local Mortgage Servicing Cost to Income(Historical Average Shown in Red Dashed Line)
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The third quarter of 2016 was marked by low mortgage rates. Presidential elections introduced uncertainty in the equity and bond markets which, as a rule, markets don’t like. Furthermore, forecasts for production and inflation remained low, helping to keep rates contained in a narrow band, hovering between 3.44% and 3.46% for the period between July and September. For the entire quarter, the 30-year fixed-rate mortgages eased from 3.6 percent in the second quarter to 3.5 percent in the third quarter of 2016, while the 10-year Treasury fell to 1.65 percent. What to expect about mortgage rates in the upcoming quarters? It seems that mortgage rates will move up but they will not change significantly while China’s growth is still slow, Japan’s woes continue, and the Eurozone continues to stagger along. However, the Fed is coming closer to reaching its dual mandate which could in turn result in rate hikes in the near future. Furthermore, the President-Elect’s policies include increased infrastructure spending, tariffs, and immigration reform all of which could drive inflationary pressures over the longer term. NAR is forecasting the 30-year fixed rate mortgage to average just 4.1 percent for 2017.
The Mortgage Market
0
40
80
120
160
200
240
280
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
5.0%
2016 Q3Q12015 Q3Q12014 Q3Q12013 Q3Q12012 Q3Q12011 Q3
30-year Fixed Mortgage Rate and Treasury Bond Yield
Spread (left axis) 30-Year FRM (Right axis)
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
2015201320112009200720052003200119991997
Ratio of Local Median Home Price to Local Average Income (Local Historical Average Shown in Red, U.S. Average in Green)
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REALTOR® Price Expectations
Texas U.S.
2016 - Sep 3.1% 3.0%REALTORS® expect higher price growth
in Texas than in the U.S. in the next 12 months. However, their price expectations
for the local market are more modest than a year ago.Prior 12 months 3.8% 3.2%
REALTOR® Price Expectations
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
5.0%
REALTOR® Price Expectations for the Next 12 Months(U.S. Average in Blue Dashed Line)
Source: NAR
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More information on the OMB's geographic definitions can be found at http://www.whitehouse.gov/omb/inforeg_statpolicy/
Bastrop County, Caldwell County, Hays County, Travis County, and Williamson County
The Austin area referred to in this report covers the geographic area of the Austin-Round Rock metro area as officially defined by the Office of Management and Budget of the U.S. Government. The official coverage area includes the following counties:
Geographic Coverage for this Report
![Page 25: Austin-Round Rock Area...Note: limits are current and include the changes made in December 2016. $49,400 7-year (28 quarters) Housing Equity Gain* $108,400 Prices are up from a year](https://reader030.vdocuments.us/reader030/viewer/2022040414/5f232862358b762913258f37/html5/thumbnails/25.jpg)
Austin-Round Rock AreaLocal Market Report, Second Quarter 2016
Today's Market…
25.2%
Local Trend
*Note: Equity gain reflects price appreciation only
Gains in the last 3 years have extended the trend of positive price growth after the
recession$15,400
69%
Conforming Loan Limit**
U.S.
FHA Loan Limit
Price Activity
$239,167$289,100
Austin
Current Median Home Price (2016 Q2)
$625,500Local Median to Conforming Limit Ratio
$417,000
not comparable
$64,800
$625,500
1-year (4-quarter) Appreciation (2016 Q2) 6.7%Prices are up from a year ago, but price
growth is slowing
Austin U.S.
$36,200
3-year (12-quarter) Appreciation (2016 Q2)4.9%
$95,100
17.8%
3-year (12-quarter) Housing Equity Gain*
9-year (36 quarters) Housing Equity Gain*
Most buyers in this market have access to government-backed financing
$331,200
Note: limits are current and include the changes made in November of 2012 and extended in November of 2013
$58,100
7-year (28 quarters) Housing Equity Gain*
$102,500
Local Price Trends
The Austin-Round Rock market is part of region 10 in the NAR governance system, which includes all of Louisiana and Texas. The 2016 NAR Regional Vice President representing region 10 is Matthew Ritchie.
Local NAR Leadership
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
2016Q2
Q42015Q2
Q42014Q2
Q42013Q2
Q42012Q2
Q42011Q2
Q42010Q2
Q42009Q2
Q42008Q2
Q42007Q2
Median Price (Red Line) and One-year Price Growth
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$105,4965-year (20-quarter)* $82,353
7-year (28 quarters)* $116,406 $77,054
1-year (4-quarter)
9-year (36 quarters)* $125,729
Benefits of Ownership: Total Equity Appreciation
Price Activity Austin U.S.
$22,672 $14,963
Total Equity Gained** through 2016 Q2 from quarter in which home was of purchased
Local Trend
$46,8783-year (12-quarter)* $70,253
Price appreciation and principle payments in the last 3 years have boosted total equity
growth since the recession
*Note: Equity gain reflects price and principle payments since purchase, prevailing 30-year fixed rate mortgage at time of purchase and a 10% downpayment. Downpayment is not included in total equity
$31,126
$34,380If purchase in 2005, the national price peak $151,724
$22,672
$110,855
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
$180,000
2015 Q22013 Q22011 Q22009 Q22007 Q22005 Q22003 Q2
Total Equity Accrued to Owner by Year and Quarter of Purchase
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Natural Resourc 6.1% 61.4 Natural R5.3%
#N/A #N/A #N/A #N/A
#N/A #N/A #N/A #N/A
Manufacturing 5.6% 55.7 Manufac 8.6%
Trade/Transporta 17.3% 172.9 Trade/Tr 19.0%
Information 2.8% 27.9 Informa1.9%
Financial Activ 5.6% 55.8 Financia5.8%
Prof. & Busine 16.7% 167.3 Professi14.1%
Educ. & Healt 11.7% 116.9 Educatio15.5%
Leisure & Hos 12.4% 124 Leisure 11.3%Other Services 4.3% 42.8 Other S 4.0%
Government 17.5% 174.8 93.9% Governm14.5% 100.0%
#N/A #N/A #N/A #N/A
#N/A #N/A #N/A #N/A
Financial Activities
Prof. & Business Services
Educ. & Health Services
Leisure & Hospitality
Service Providing Excluding Government
5,200
NA
NA
12-month Job Change (May)
Year-ago Unemployment Rate
1.9%1-year (12 month) Job Growth Rate
118,500
37,100
Not Comparable
Unemployment in Austin is better than the national average and improving
Not Comparable
36,300
36-month Job Change (Jun)
Texas's economy is growing, but decelerated from last month's 2.32% change
and lags the rest of the nation
12-month Job Change (Jun)
Local Economic Outlook Austin U.S.
U.S.
State Economic Activity Index
Construction
6,100
4.9%
5.3%
3.9%
Austin-Round Rock Area
Goods Producing
-2,400 Manufacturing
9,200
Local employment growth is strong compared to other markets
3.4%
3.6%
Current Unemployment Rate (Jun)
3.0%
Drivers of Local Supply and Demand…
Not Comparable
12-month Employment Change by Industry in the Austin-Round Rock Area (Jun - 2016)
1,800
2,700
U.S.Texas
NA
Natural Resources and Mining
Natural Resources/Mining/Construction
NA
Share of Total Employment by Industry
Information
Other Services
Government
12-month change (2016 - Jun)
36-month change (2016 - Jun)10.2%12.2%
2.3%
1,900
6,300
5,800
Employment has held up and is on an upward trend
500
Trade/Transportation/Utilities
Natural Resources/Mining/Constru
ct6.1%
Manufacturing
5.6%
Trade/Transportation/Utilit
ies17.3%
Information2.8%
Financial Activities
5.6%Prof. & Business Services16.7%
Educ. & Health
Services11.7%
Leisure & Hospitality
12.4%
Other Services
4.3%
Government17.5%
Natural Resources/
Mining/Construct5.3%
Manufacturing
8.6%
Trade/Transportation/Uti
lities19.0%
Information1.9%Financial
Activities5.8%
Professional & Business
Services14.1%
Educational & Health Services15.5%
Leisure & Hospitality
11.3%
Other Services
4.0%
Government14.5%
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Construction is on the rise relative to last year, suggesting that the local inventory has
stabilized
The current level of construction is 46.3% above the long-term average
While new construction is the traditional driver of supply in real estate, foreclosures and short-sales now have a strong impact on inventories, particularly at the local level. Rising inventories, through construction or distressed sales, place downward pressure on the median home prices.
Local Fundamentals
10.6%
not comparable
12-month Sum of 1-unit Building Permits through Jun 2016
12,378
Austin
not comparable
8-year average for 12-month Sum of 1-Unit Building Permits
Single-Family Housing Permits (Jun 2016) 12-month sum vs. a year ago
4.9%
8,462 Production above trend for an extended
period of time could cause prices to moderate as inventory is built up.
U.S.
New Housing Construction
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
State Total Foreclosure Rate vs. U.S Average(U.S. Average in Blue Dashed Line)
Source: Mortgage Bankers' Association
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
Construction: 12-month Sum of Local Housing Permits (Historical Average Shown in Red Dashed Line)
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Monthly Mortgage Payment to Income
Ratio for 2016 Q2
Ratio for 2015
15.8%
Historically strong, but weaker than the first quarter of 2016
15.6%
2.8
Austin
Austin
Median Home Price to Income
11.6%
2.1
2.3
2.7
2.9
The price-to-income ratio is high by historic standards and getting worse
Affordability
12.3%
U.S.
Ratio for 2016 Q2
Ratio for 2015
Historical Average More affordable than most markets19.5%12.4%
Affordable compared to most marketsHistorical Average 1.8
U.S.
0%
5%
10%
15%
20%
25%
30%
2015201320112009200720052003200119991997
Long-Term Trend: Ratio of Local Mortgage Servicing Cost to Income (Local Historical Average Shown in Red, U.S. Average in Green)
0%
2%
4%
6%
8%
10%
12%
14%
2016 Q22016 Q12015 Q42015 Q32015 Q22015 Q12014 Q42014 Q3
Recent Trend - Local Mortgage Servicing Cost to Income(Historical Average Shown in Red Dashed Line)
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The second quarter of 2016 has been quite tumultuous with the surprising “Brexit” vote in the United Kingdom. While British citizens voted to leave the European Union last June, the full impact of the vote could take several years to be seen. In the near future, low mortgage rates and stronger refinancing are expected in the U.S.. Meanwhile, the 30-year fixed-rate mortgages eased from 3.7 percent in the 1st quarter of 2016 to 3.6 percent in the second quarter of 2016. Similarly, the 10-year Treasury fell to 1.75 percent which is the lowest rate after Q4 2012. As a result of the current market conditions, existing homeowners benefit from low rates by refinancing their mortgages while home affordability is increasing for first-time homebuyers. Rates are likely to remain unchanged as global economies remain weak. The uncertainty in China, Japan, Russia and Eurozone is expected to boost safe-haven buying which benefits mortgage-backed securities market. NAR is now forecasting fewer rate hikes by the FED in 2016 and as a result the 30-year fixed rate mortgage is now expected to average just 4.3 percent for 2016.
The Mortgage Market
0
40
80
120
160
200
240
280
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
5.0%
2016 Q2Q42015 Q2Q42014 Q2Q42013 Q2Q42012 Q2Q42011 Q2
30-year Fixed Mortgage Rate and Treasury Bond Yield
Spread (left axis) 30-Year FRM (Right axis)
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
2015201320112009200720052003200119991997
Ratio of Local Median Home Price to Local Average Income (Local Historical Average Shown in Red, U.S. Average in Green)
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REALTOR® Price Expectations
Texas U.S.
2016 - Jul 3.9% 3.6%REALTORS® expect higher price growth
in Texas than in the U.S. in the next 12 months. However, their price expectations
for the local market are more modest than a year ago.Prior 12 months 4.3% 3.4%
REALTOR® Price Expectations
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
REALTOR® Price Expectations for the Next 12 Months(U.S. Average in Blue Dashed Line)
Source: NAR
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More information on the OMB's geographic definitions can be found at http://www.whitehouse.gov/omb/inforeg_statpolicy/
Bastrop County, Caldwell County, Hays County, Travis County, and Williamson County
The Austin area referred to in this report covers the geographic area of the Austin-Round Rock metro area as officially defined by the Office of Management and Budget of the U.S. Government. The official coverage area includes the following counties:
Geographic Coverage for this Report
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Austin-Round Rock AreaLocal Market Report, First Quarter 2016
Today's Market…
28.6%
Local Trend
*Note: Equity gain reflects price appreciation only
Gains in the last 3 years have extended the trend of positive price growth after
the recession$1,667
65%
Conforming Loan Limit**
U.S.
FHA Loan Limit
Price Activity$215,767$269,700
AustinCurrent Median Home Price (2016 Q1)
$625,500Local Median to Conforming Limit Ratio
$417,000
not comparable
$48,200
$625,500
1-year (4-quarter) Appreciation (2016 Q1) 7.9%Prices are up from a year ago, but price
growth is slowing
Austin U.S.
$39,833
3-year (12-quarter) Appreciation (2016 Q1)6.1%
$87,500
22.6%3-year (12-quarter) Housing Equity Gain*
9-year (36 quarters) Housing Equity Gain*
Most buyers in this market have access to government-backed financing$331,200
Note: limits are current and include the changes made in November of 2012 and extended in November of 2013
$59,9007-year (28 quarters) Housing Equity Gain*
$93,500
Local Price Trends
The Austin-Round Rock market is part of region 10 in the NAR governance system, which includes all of Louisiana and Texas. The 2016 NAR Regional Vice President representing region 10 is Matthew Ritchie.
Local NAR Leadership
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
-6%-4%-2%0%2%4%6%8%10%12%
2016Q1
Q32015Q1
Q32014Q1
Q32013Q1
Q32012Q1
Q32011Q1
Q32010Q1
Q32009Q1
Q32008Q1
Q32007Q1
Median Price (Red Line) and One-year Price Growth
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$95,9115-year (20-quarter)* $68,7277-year (28 quarters)* $107,416 $59,758
1-year (4-quarter)
9-year (36 quarters)* $115,865
Benefits of Ownership: Total Equity Appreciation
Price Activity Austin U.S.$23,994 $15,781
Total Equity Gained** through 2016 Q1 from quarter in which home was of purchased
Local Trend
$49,3563-year (12-quarter)* $71,256Price appreciation and principle
payments in the last 3 years have boosted total equity growth since the
recession
*Note: Equity gain reflects price and principle payments since purchase, prevailing 30-year fixed rate mortgage at time of purchase and a 10% downpayment. Downpayment is not included in total equity
$16,435
$30,059If purchase in 2005, the national price peak $142,662
$23,994
$104,024
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
2015 Q12013 Q12011 Q12009 Q12007 Q12005 Q12003 Q1
Total Equity Accrued to Owner by Year and Quarter of Purchase
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Natural Resour 6.0% 58.9 Natural 5.0%
#N/A #N/A #N/A #N/A
#N/A #N/A #N/A #N/A
Manufacturing 5.8% 56.7 Manufac8.5%
Trade/Transpo 17.2% 169.8 Trade/T 18.8%
Information 2.8% 27.2 Informa1.9%
Financial Act 5.6% 54.8 Financi5.7%
Prof. & Busin 16.6% 163.1 Profess14.0%
Educ. & Heal 11.8% 115.9 Educat 15.8%
Leisure & Ho 12.2% 120.6 Leisure10.7%Other Service 4.2% 41.6 Other S3.9%
Government 17.9% 175.9 94.0% Govern15.6% 100.0%#N/A #N/A #N/A #N/A#N/A #N/A #N/A #N/A
Information Financial Activities Prof. & Business Services Educ. & Health Services
Leisure & Hospitality
Service Providing Excluding Government Other Services
Government
6,000
NA
NA
12-month Job Change (Feb)
Year-ago Unemployment Rate
2.0%1-year (12 month) Job Growth Rate
119,400
39,900
Not Comparable
Unemployment in Austin is better than the national average and improving
Not Comparable
40,200
36-month Job Change (Mar)
Texas's economy is growing, but decelerated from last month's 2.55% change and lags the rest of the nation
12-month Job Change (Mar)
Local Economic Outlook Austin U.S.
U.S.
State Economic Activity Index
Construction
4,800
5.0%
5.5%4.2%
Austin-Round Rock Area
Goods Producing
-700 Manufacturing
9,000
Local employment growth is strong compared to other markets
3.1%
3.3%
Current Unemployment Rate (Mar)
3.1%
Drivers of Local Supply and Demand…
Not Comparable
12-month Employment Change by Industry in the Austin-Round Rock Area (Mar - 2016)
1,800
2,200
U.S.Texas
NA Natural Resources and Mining Natural Resources/Mining/Construction
NA
Share of Total Employment by Industry
12-month change (2016 - Mar)
36-month change (2016 - Mar)10.5%13.1%
2.5%
1,9005,600
8,400
Employment growth has eased, but remains positive
900
Trade/Transportation/Utilities
Natural Resources/Mining/Con
struct6.0% Manufacturi
ng5.8%
Trade/Transportation/Uti
lities17.2%
Information2.8%
Financial Activities
5.6%Prof. & Business Services16.6%
Educ. & Health
Services11.8%
Leisure & Hospitality
12.2%
Other Services
4.2%
Government
17.9%
Natural Resources/Mining/Con
struct5.0%
Manufacturing
8.5%
Trade/Transportation/
Utilities18.8%
Information1.9%Financial
Activities5.7%
Professional &
Business Services14.0%
Educational & Health Services15.8%
Leisure & Hospitality
10.7%
Other Services
3.9%
Government
15.6%
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Construction is down from last year, but appears to have bottomed.
The current level of construction is 41.7% above the long-term average
While new construction is the traditional driver of supply in real estate, foreclosures and short-sales now have a strong impact on inventories, particularly at the local level. Rising inventories, through construction or distressed sales, place downward pressure on the median home prices.
Local Fundamentals
11.3%
not comparable
12-month Sum of 1-unit Building Permits through Mar 2016 11,909
Austin
not comparable
8-year average for 12-month Sum of 1-Unit Building Permits
Single-Family Housing Permits (Mar 2016) 12-month sum vs. a year ago -0.1%
8,407 Production above trend for an
extended period of time could cause prices to moderate as inventory is built
U.S.New Housing Construction
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
State Total Foreclosure Rate vs. U.S Average(U.S. Average in Blue Dashed Line)
Source: Mortgage Bankers' Association
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
Construction: 12-month Sum of Local Housing Permits (Historical Average Shown in Red Dashed Line)
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Monthly Mortgage Payment to Income
Ratio for 2016 Q1Ratio for 2015
14.5%Historically strong and an improvement
over the fourth quarter of 201515.6%
2.8
Austin
Austin
Median Home Price to Income
11.6%
2.12.1
2.72.6
The price-to-income ratio is high by historic standards and getting worse
Affordability
11.7%
U.S.
Ratio for 2016 Q1
Ratio for 2015
Historical Average More affordable than most markets19.5%12.4%
Affordable compared to most marketsHistorical Average 1.8
U.S.
0%
5%
10%
15%
20%
25%
30%
2015201320112009200720052003200119991997
Long-Term Trend: Ratio of Local Mortgage Servicing Cost to Income (Local Historical Average Shown in Red, U.S. Average in Green)
0%
2%
4%
6%
8%
10%
12%
14%
2016 Q12015 Q42015 Q32015 Q22015 Q12014 Q42014 Q32014 Q2
Recent Trend - Local Mortgage Servicing Cost to Income(Historical Average Shown in Red Dashed Line)
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The first quarter of 2016 was marked by paroxysms in financial, energy, and commodity markets. The uncertainty in China and the emerging-market economies, the gathering doubt about the sustainability of the modern European project, and weakness in domestic growth were the issues of the early days of 2016. With regard to the mortgage market, the year began after the FED started its tightening cycle with the first rate hike this past December. However, since the start of the year mortgage rates have dropped as the FED held off on expected rate hikes. The 30-year fixed-rate mortgages eased from 3.9 percent in the 4th quarter of 2015 to 3.7 percent in the first quarter of 2016. The 10-year Treasury fell to 1.92 percent which is the lowest rate after Q4 2012. Rates are likely to remain low through the spring as the market deals with international instability and mixed signals for the domestic economy. NAR is now forecasting fewer rate hikes by the FED in 2016 and as a result the 30-year fixed rate mortgage is now expected to average just 4.3 percent for 2016.”
The Mortgage Market
0
40
80
120
160
200
240
280
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
2016 Q1Q32015 Q1Q32014 Q1Q32013 Q1Q32012 Q1Q32011 Q1
30-year Fixed Mortgage Rate and Treasury Bond Yield
Spread (left axis) 30-Year FRM (Right axis) 10-Year Treasury Bond (Right Axis)
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
2015201320112009200720052003200119991997
Ratio of Local Median Home Price to Local Average Income (Local Historical Average Shown in Red, U.S. Average in Green)
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Texas U.S.
2016 - Apr 3.7% 3.8%REALTORS® expect weaker price
growth in Texas than in the U.S. in the next 12 months. Their price
expectations for the local market are more modest than a year ago.Prior 12 months 3.9% 3.9%
REALTOR® Price Expectations
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
REALTOR® Price Expectations for the Next 12 Months(U.S. Average in Blue Dashed Line)
Source: NAR
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More information on the OMB's geographic definitions can be found at http://www.whitehouse.gov/omb/inforeg_statpolicy/
Bastrop County, Caldwell County, Hays County, Travis County, and Williamson County
The Austin area referred to in this report covers the geographic area of the Austin-Round Rock metro area as officially defined by the Office of Management and Budget of the U.S. Government. The official coverage area includes the
following counties:
Geographic Coverage for this Report
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Austin-Round Rock AreaLocal Market Report, Fourth Quarter 2015
Today's Market…
30.5%
Local Trend
*Note: Equity gain reflects price appreciation only
Gains in the last 3 years have extended the trend of positive price growth after
the recession$1,633
64%
Conforming Loan Limit**
U.S.
FHA Loan Limit
Price Activity$221,067$265,000
AustinCurrent Median Home Price (2015 Q4)
$625,500Local Median to Conforming Limit Ratio
$417,000
not comparable
$40,300
$625,500
1-year (4-quarter) Appreciation (2015 Q4) 8.7%Prices continue to grow relative to last
year
Austin U.S.
$42,233
3-year (12-quarter) Appreciation (2015 Q4)6.5%
$80,200
23.6%3-year (12-quarter) Housing Equity Gain*
9-year (36 quarters) Housing Equity Gain*
Most buyers in this market have access to government-backed financing$331,200
Note: limits are current and include the changes made in November of 2012 and extended in November of 2013
$62,0007-year (28 quarters) Housing Equity Gain*
$90,400
Local Price Trends
The Austin-Round Rock market is part of region 10 in the NAR governance system, which includes all of Louisiana and Texas. The 2016 NAR Regional Vice President representing region 10 is Matthew Ritchie.
Local NAR Leadership
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
-6%-4%-2%0%2%4%6%8%10%12%
2015Q4
Q22014Q4
Q22013Q4
Q22012Q4
Q22011Q4
Q22010Q4
Q22009Q4
Q22008Q4
Q22007Q4
Q22006Q4
Median Price (Red Line) and One-year Price Growth
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$90,2585-year (20-quarter)* $62,7647-year (28 quarters)* $98,187 $52,606
1-year (4-quarter)
9-year (36 quarters)* $112,492
Benefits of Ownership: Total Equity Appreciation
Price Activity Austin U.S.$25,134 $16,784
Total Equity Gained** through 2015 Q4 from quarter in which home was of purchased
Local Trend
$52,1293-year (12-quarter)* $73,233Price appreciation and principle
payments in the last 3 years have boosted total equity growth since the
recession
*Note: Equity gain reflects price and principle payments since purchase, prevailing 30-year fixed rate mortgage at time of purchase and a 10% downpayment. Downpayment is not included in total equity
$16,571
$11,104If purchase in 2005, the national price peak $122,344
$25,134
$99,242
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
2014 Q42012 Q42010 Q42008 Q42006 Q42004 Q42002 Q4
Total Equity Accrued to Owner by Year and Quarter of Purchase
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Natural Resour 5.7% 54.6 Natural 4.9%
#N/A #N/A #N/A #N/A
#N/A #N/A #N/A #N/A
Manufacturing 5.8% 56.3 Manufac8.7%
Trade/Transpo 17.4% 168.1 Trade/T 19.1%
Information 2.7% 26.3 Informa1.9%
Financial Act 5.6% 54.3 Financi5.8%
Prof. & Busin 17.2% 165.4 Profess13.9%
Educ. & Heal 11.6% 112 Educat 15.8%
Leisure & Ho 11.8% 113.7 Leisure10.4%Other Service 4.3% 41.1 Other S4.0%
Government 17.8% 171.9 94.3% Govern15.5% 100.0%#N/A #N/A #N/A #N/A#N/A #N/A #N/A #N/A
Information Financial Activities Prof. & Business Services Educ. & Health Services
Leisure & Hospitality
Service Providing Excluding Government Other Services
Government
2,500
NA
NA
12-month Job Change (Nov)
Year-ago Unemployment Rate
2.1%1-year (12 month) Job Growth Rate
101,100
34,900
Not Comparable
Unemployment in Austin is better than the national average and improving
Not Comparable
37,300
36-month Job Change (Dec)
Texas's economy is growing, but decelerated from last month's 2.75% change and lags the rest of the nation
12-month Job Change (Dec)
Local Economic Outlook Austin U.S.
U.S.
State Economic Activity Index
Construction
4,200
5.0%
5.6%3.8%
Austin-Round Rock Area
Goods Producing
-1,600 Manufacturing
3,800
Local employment growth is strong compared to other markets
3.1%
3.4%
Current Unemployment Rate (Dec)
3.2%
Drivers of Local Supply and Demand…
Not Comparable
12-month Employment Change by Industry in the Austin-Round Rock Area (Dec - 2015)
1,200
1,300
U.S.Texas
NA Natural Resources and Mining Natural Resources/Mining/Construction
NA
Share of Total Employment by Industry
12-month change (2015 - Dec)
36-month change (2015 - Dec)10.6%12.9%
2.5%
1,70013,200
8,100
Employment growth has eased, but remains positive
500
Trade/Transportation/Utilities
Natural Resources/Mining/Con
struct5.7%
Manufacturing
5.8%
Trade/Transportation/Uti
lities17.4%
Information2.7%
Financial Activities
5.6%Prof. & Business Services17.2%
Educ. & Health
Services11.6%
Leisure & Hospitality
11.8%
Other Services
4.3%
Government
17.8%
Natural Resources/Mining/Con
struct4.9%
Manufacturing
8.7%
Trade/Transportation/
Utilities19.1%
Information1.9%Financial
Activities5.8%
Professional &
Business Services13.9%
Educational & Health Services15.8%
Leisure & Hospitality
10.4%
Other Services
4.0%
Government
15.5%
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Construction continues to decline from last year
The current level of construction is 36.9% above the long-term average
While new construction is the traditional driver of supply in real estate, foreclosures and short-sales now have a strong impact on inventories, particularly at the local level. Rising inventories, through construction or distressed sales, place downward pressure on the median home prices.
Local Fundamentals
9.7%
not comparable
12-month Sum of 1-unit Building Permits through Dec 2015 11,514
Austin
not comparable
8-year average for 12-month Sum of 1-Unit Building Permits
Single-Family Housing Permits (Dec 2015) 12-month sum vs. a year ago -0.4%
8,412 Production above trend for an
extended period of time could cause prices to moderate as inventory is built
U.S.New Housing Construction
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
State Total Foreclosure Rate vs. U.S Average(U.S. Average in Blue Dashed Line)
Source: Mortgage Bankers' Association
02,0004,0006,0008,000
10,00012,00014,00016,00018,000
Construction: 12-month Sum of Local Housing Permits (Historical Average Shown in Red Dashed Line)
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Monthly Mortgage Payment to Income
Ratio for 2015 Q4Ratio for 2015
15.1%Historically strong and an improvement
over the third quarter of 201515.6%
2.8
Austin
Austin
Median Home Price to Income
12.0%
2.12.1
2.72.7
The price-to-income ratio is high by historic standards and getting worse
Affordability
12.2%
U.S.
Ratio for 2015 Q4
Ratio for 2015
Historical Average More affordable than most markets19.5%12.8%
Affordable compared to most marketsHistorical Average 1.9
U.S.
0%
5%
10%
15%
20%
25%
30%
2015201320112009200720052003200119991997
Long-Term Trend: Ratio of Local Mortgage Servicing Cost to Income (Local Historical Average Shown in Red, U.S. Average in Green)
0%2%4%6%8%
10%12%14%16%
2015 Q42015 Q32015 Q22015 Q12014 Q42014 Q32014 Q22014 Q1
Recent Trend - Local Mortgage Servicing Cost to Income(Historical Average Shown in Red Dashed Line)
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Despite indications of economic strength early in the 4th quarter, the Federal Reserve held of its much anticipated rate increases until mid-December. However, a fresh set of weak economic numbers centered on a slowing Chinese economy, excess oil, and the potential impacts on domestic oil exploration and manufacturing softened domestic economic growth in the 4th quarter. As a result, Treasuries slumped as investors moved money into this safe haven and mortgage rates benefited. The average 30-year fixed rate mortgage eased modestly from 4.0 percent in the 3rd quarter to 3.9 percent in the 4th. The 10-year Treasury did not fall as much MBS and as a result the spread between them eased from 173 basis points to 171. While mortgage rates remained cheap, lenders were hit with the implementation of the new TILA-RESPA Integrated Disclosure rules (TRID) on October 3rd. Some lenders struggled to comply and a result roughly 10 percent of settlements were delayed by roughly 8 days on average, though few were canceled. Rates are likely to remain low through the spring as the market deals with international instability and the FED pulls back from planned rate hikes, but some lenders may continue to have issues with the new settlement procedures. NAR is now forecasting fewer rate hikes by the FED in 2016 and as a result the 30-year fixed rate mortgage is now expect to average just 4.3 percent for 2016, down from earlier estimates near 5.0 percent.
The Mortgage Market
0
40
80
120
160
200
240
280
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
2015 Q4Q22014 Q4Q22013 Q4Q22012 Q4Q22011 Q4Q22010 Q4
30-year Fixed Mortgage Rate and Treasury Bond Yield
Spread (left axis) 30-Year FRM (Right axis) 10-Year Treasury Bond (Right Axis)
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
2015201320112009200720052003200119991997
Ratio of Local Median Home Price to Local Average Income (Local Historical Average Shown in Red, U.S. Average in Green)
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Texas U.S.
2015 - Dec 3.1% 3.3%REALTORS® expect weaker price
growth in Texas than in the U.S. in the next 12 months. Their price
expectations for the local market are more modest than a year ago.Prior 12 months 3.9% 3.4%
REALTOR® Price Expectations
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
REALTOR® Price Expectations for the Next 12 Months(U.S. Average in Blue Dashed Line)
Source: NAR
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More information on the OMB's geographic definitions can be found at http://www.whitehouse.gov/omb/inforeg_statpolicy/
Bastrop County, Caldwell County, Hays County, Travis County, and Williamson County
The Austin area referred to in this report covers the geographic area of the Austin-Round Rock metro area as officially defined by the Office of Management and Budget of the U.S. Government. The official coverage area includes the
following counties:
Geographic Coverage for this Report
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Austin-Round Rock AreaLocal Market Report, First Quarter 2015
Today's Market…
28.8%
Local Trend
*Note: Equity gain reflects price appreciation only
Gains in the last 3 years have extended the trend of positive price growth after
the recession-$13,067
60%
Conforming Loan Limit**
U.S.
FHA Loan Limit
Price Activity$203,867$249,100
AustinCurrent Median Home Price (2015 Q1)
$625,500Local Median to Conforming Limit Ratio
$417,000
not comparable
$5,333
$625,500
1-year (4-quarter) Appreciation (2015 Q1) 10.2%Prices are up from a year ago, but price
growth is slowing
Austin U.S.
$45,533
3-year (12-quarter) Appreciation (2015 Q1)6.7%
$64,600
28.8%3-year (12-quarter) Housing Equity Gain*
9-year (36 quarters) Housing Equity Gain*
Most buyers in this market have access to government-backed financing$331,200
Note: limits are current and include the changes made in November of 2012 and extended in November of 2013
$55,7007-year (28 quarters) Housing Equity Gain*
$81,900
Local Price Trends
The Austin-Round Rock market is part of region 10 in the NAR governance system, which includes all of Louisiana and Texas. The 2015 NAR Regional Vice President representing region 10 is Bill Jones.
Local NAR Leadership
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
-6%-4%-2%0%2%4%6%8%10%12%
2015Q1
Q32014Q1
Q32013Q1
Q32012Q1
Q32011Q1
Q32010Q1
Q32009Q1
Q32008Q1
Q32007Q1
Q32006Q1
Median Price (Red Line) and One-year Price Growth
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$80,2675-year (20-quarter)* $47,4447-year (28 quarters)* $82,531 $17,200
1-year (4-quarter)
9-year (36 quarters)* $103,075
Benefits of Ownership: Total Equity Appreciation
Price Activity Austin U.S.$26,516 $15,753
Total Equity Gained** through 2015 Q1 from quarter in which home was of purchased
Local Trend
$53,5653-year (12-quarter)* $65,510Price appreciation and principle
payments in the last 3 years have boosted total equity growth since the
recession
*Note: Equity gain reflects price and principle payments since purchase, prevailing 30-year fixed rate mortgage at time of purchase and a 10% downpayment. Downpayment is not included in total equity
$100
$16,323If purchase in 2005, the national price peak $118,858
$26,516
$83,533
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
2014 Q12012 Q12010 Q12008 Q12006 Q12004 Q12002 Q1
Total Equity Accrued to Owner by Year and Quarter of Purchase
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Natural Resour 5.4% 49.9 Natural 5.0%
#N/A #N/A #N/A #N/A
#N/A #N/A #N/A #N/A
Manufacturing 6.2% 57.9 Manufac8.7%
Trade/Transpo 17.2% 160.1 Trade/T 18.8%
Information 2.8% 25.6 Informa2.0%
Financial Act 5.7% 52.6 Financi5.7%
Prof. & Busin 16.2% 150.6 Profess13.9%
Educ. & Heal 11.8% 110.1 Educat 15.6%
Leisure & Ho 11.6% 108.3 Leisure10.6%Other Service 4.3% 40.3 Other S4.0%
Government 18.7% 174.3 94.6% Govern15.8% 100.0%#N/A #N/A #N/A #N/A#N/A #N/A #N/A #N/A
Information Financial Activities Prof. & Business Services Educ. & Health Services
Leisure & Hospitality
Service Providing Excluding Government Other Services
Government
5,200
NA
NA
12-month Job Change (Feb)
Year-ago Unemployment Rate
2.1%1-year (12 month) Job Growth Rate
103,100
22,800
Not Comparable
Unemployment in Austin is better than the national average and improving
Not Comparable
26,100
36-month Job Change (Mar)
Texas's economy is stronger than the nation's, but slowed from last month's
4.55% change
12-month Job Change (Mar)
Local Economic Outlook Austin U.S.
U.S.
State Economic Activity Index
Construction
1,400
5.5%
6.6%2.5%
Austin-Round Rock Area
Goods Producing
0 Manufacturing
4,500
Local employment growth is strong compared to other markets
3.3%
4.4%
Current Unemployment Rate (Mar)
3.4%
Drivers of Local Supply and Demand…
Not Comparable
12-month Employment Change by Industry in the Austin-Round Rock Area (Mar - 2015)
1,400
1,700
U.S.Texas
NA Natural Resources and Mining Natural Resources/Mining/Construction
NA
Share of Total Employment by Industry
12-month change (2015 - Mar)
36-month change (2015 - Mar)9.3%13.2%
4.3%
1,3002,900
3,200
Employment growth has eased, but remains positive
1,200
Trade/Transportation/Utilities
Natural Resources/Mining/Con
struct5.4%
Manufacturing
6.2%
Trade/Transportation/Uti
lities17.2%
Information2.8%
Financial Activities
5.7%Prof. & Business Services16.2%
Educ. & Health
Services11.8%
Leisure & Hospitality
11.6%
Other Services
4.3%
Government
18.7%
Natural Resources/Mining/Con
struct5.0%
Manufacturing
8.7%
Trade/Transportation/
Utilities18.8%
Information2.0%Financial
Activities5.7%
Professional &
Business Services13.9%
Educational & Health Services15.6%
Leisure & Hospitality
10.6%
Other Services
4.0%
Government
15.8%
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Construction is on the rise relative to last year, suggesting that the local
inventory has stabilized
The current level of construction is 38.3% above the long-term average
While new construction is the traditional driver of supply in real estate, foreclosures and short-sales now have a strong impact on inventories, particularly at the local level. Rising inventories, through construction or distressed sales, place downward pressure on the median home prices.
Local Fundamentals
3.1%
not comparable
12-month Sum of 1-unit Building Permits through Mar 2015 11,919
Austin
not comparable
8-year average for 12-month Sum of 1-Unit Building Permits
Single-Family Housing Permits (Mar 2015) 12-month sum vs. a year ago 25.5%
8,619 Production above trend for an
extended period of time could cause prices to moderate as inventory is built
U.S.New Housing Construction
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
State Total Foreclosure Rate vs. U.S Average(U.S. Average in Blue Dashed Line)
Source: Mortgage Bankers' Association
02,0004,0006,0008,000
10,00012,00014,00016,00018,00020,000
Construction: 12-month Sum of Local Housing Permits (Historical Average Shown in Red Dashed Line)
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Monthly Mortgage Payment to Income
Ratio for 2015 Q1Ratio for 2014
14.3%Historically strong and an improvement
over the fourth quarter of 201415.8%
2.7
Austin
Austin
Median Home Price to Income
11.8%
2.02.0
2.72.6
The price-to-income ratio is high by historic standards and getting worse
Affordability
11.4%
U.S.
Ratio for 2015 Q1
Ratio for 2014
Historical Average More affordable than most markets20.0%12.7%
Affordable compared to most marketsHistorical Average 1.8
U.S.
0%
5%
10%
15%
20%
25%
30%
2014201220102008200620042002200019981996
Long-Term Trend: Ratio of Local Mortgage Servicing Cost to Income (Local Historical Average Shown in Red, U.S. Average in Green)
0%2%4%6%8%
10%12%14%16%
2015 Q12014 Q42014 Q32014 Q22014 Q12013 Q42013 Q32013 Q2
Recent Trend - Local Mortgage Servicing Cost to Income(Historical Average Shown in Red Dashed Line)
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The headline measure of economic activity, GDP growth, swung from a soft 2.2% in the 4th quarter of 2014 to a dismal 0.2% in the 1st quarter of 2015 with some suggesting that the 1st quarter figure would be revised lower. Sharp declines in global fuel prices over the winter impacted the domestic oil industry, while a rapid rise in the value of the dollar impacted domestic manufacturers’ ability to export and increased competition from importers. As a result, employment in both industries slumped in the first quarter. Compounding these issues was weakness in single family housing starts and construction. Weather was partially to blame, but builder sentiment was weak reflecting a pullback in consumer confidence. While not a recession, this economic soft patch weighed on mortgage rates in the 1st quarter which saw the average 30-year fixed rate fall from 3.97% in the 4th quarter to 3.73% in the 1st quarter of 2015. Treasury rates fell by more and a result the spread between the two rose from 169 basis points to 176. Affordability surged on sub-4% mortgage rates that were augmented by a sharp 50 basis point cut to the FHA’s annual mortgage insurance premium. NAR Research forecasts the average rate for a 30-year fixed rate mortgage to climb to 4.3% by year end 2014 and to average 5.2% in 2016 as the Federal Reserve begins to raise short term rates in response to improving domestic and international economic conditions gain steam.
The Mortgage Market
0
40
80
120
160
200
240
280
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
2015 Q1Q32014 Q1Q32013 Q1Q32012 Q1Q32011 Q1Q32010 Q1
30-year Fixed Mortgage Rate and Treasury Bond Yield
Spread (left axis) 30-Year FRM (Right axis) 10-Year Treasury Bond (Right Axis)
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
2014201220102008200620042002200019981996
Ratio of Local Median Home Price to Local Average Income (Local Historical Average Shown in Red, U.S. Average in Green)
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Texas U.S.
2015 - Mar 3.7% 3.5%REALTORS® expect higher price
growth in Texas than in the U.S. in the next 12 months. However, their price expectations for the local market are
more modest than a year ago.Prior 12 months 4.7% 3.5%
REALTOR® Price Expectations
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
REALTOR® Price Expectations for the Next 12 Months(U.S. Average in Blue Dashed Line)
Source: NAR
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More information on the OMB's geographic definitions can be found at http://www.whitehouse.gov/omb/inforeg_statpolicy/
Bastrop County, Caldwell County, Hays County, Travis County, and Williamson County
The Austin area referred to in this report covers the geographic area of the Austin-Round Rock metro area as officially defined by the Office of Management and Budget of the U.S. Government. The official coverage area includes the
following counties:
Geographic Coverage for this Report
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Austin-Round Rock AreaLocal Market Report, Second Quarter 2014
Today's Market…
24.2%
*Note: Equity gain reflects price appreciation only
Gains in the last 3 years have extended the trend of positive price growth after
the recession-$8,000
59%
Conforming Loan Limit** $625,500
U.S.
FHA Loan Limit
Price Activity$212,267$247,500
AustinCurrent Median Home Price (2014 Q2)
$625,500Local Median to Conforming Limit Ratio
$417,000
not comparable
-$11,500
Local Trend
3-year (12-quarter) Housing Equity Gain*
9-year (36 quarters) Housing Equity Gain*
Most buyers in this market have access to government-backed financing$305,900
Note: limits are current and include the changes made in November of 2012 and extended in November of 2013
$48,2007-year (28 quarters) Housing Equity Gain*
$80,700
1-year (4-quarter) Appreciation (2014 Q2) 7.1%Prices are up from a year ago, but price
growth is slowing
Austin U.S.
$43,600
3-year (12-quarter) Appreciation (2014 Q2)4.6%
$60,900
25.8%
Local Price Trends
The Austin-Round Rock market is part of region 10 in the NAR governance system, which includes all of Louisiana and Texas. The 2014 NAR Regional Vice President representing region 10 is David McKey.
Local NAR Leadership
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
-6%-4%-2%0%2%4%6%8%10%
2014Q2
Q42013Q2
Q42012Q2
Q42011Q2
Q42010Q2
Q42009Q2
Q42008Q2
Q42007Q2
Q42006Q2
Q42005Q2
Median Price (Red Line) and One-year Price Growth
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$67,9555-year (20-quarter)* $48,2257-year (28 quarters)* $77,800 $1,750
1-year (4-quarter)
$51,2043-year (12-quarter)* $57,185Price appreciation and principle
payments in the last 3 years have boosted total equity growth since the
recession
*Note: Equity gain reflects price and principle payments since purchase, prevailing 30-year fixed rate mortgage at time of purchase and a 10% downpayment. Downpayment is not included in total equity
$5,043If purchase in 2005, the national price peak $103,355
9-year (36 quarters)* $103,355 $5,043
Benefits of Ownership: Total Equity Appreciation
Price Activity Austin U.S.$20,405 $12,731
Total Equity Gained** through 2014 Q2 from quarter in which home was of purchased
Local Trend
$20,405
$68,505
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
2013 Q22011 Q22009 Q22007 Q22005 Q22003 Q22001 Q2
Total Equity Accrued to Owner by Year and Quarter of Purchase
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Natural Resour 5.3% 47.8 Natural 5.2%
#N/A #N/A #N/A #N/A
#N/A #N/A #N/A #N/A
Manufacturing 5.9% 53.5 Manufac8.8%
Trade/Transpo 17.7% 159.5 Trade/T 19.1%
Information 2.7% 23.9 Informa1.9%
Financial Act 5.5% 49.7 Financi5.8%
Prof. & Busin 16.2% 146 Profess14.0%
Educ. & Heal 11.1% 99.6 Educat 15.2%
Leisure & Ho 12.1% 108.7 Leisure11.1%Other Service 4.4% 39.2 Other S4.0%
Government 19.1% 171.8 94.7% Govern14.9% 100.0%#N/A #N/A #N/A #N/A#N/A #N/A #N/A #N/A
Information Financial Activities Prof. & Business Services Educ. & Health Services
Leisure & Hospitality
Service Providing Excluding Government Other Services
Government
-1,500
NA
NA
12-month Job Change (May)
Year-ago Unemployment Rate
1.7%1-year (12 month) Job Growth Rate
Not Comparable
Unemployment in Austin is better than the national average and improving
Not Comparable
31,900
36-month Job Change (Jun)
The economy of Texas has outpaced the rest of the nation and improved modestly from last month's 4.41%
change
12-month Job Change (Jun)
3.2%
4.4%
5.7%
Current Unemployment Rate (Jun)
Local Economic Outlook Austin U.S.
101,400
31,200
12-month Employment Change by Industry in the Austin-Round Rock Area (Jun - 2014)
800
1,300
U.S.
U.S.
State Economic Activity Index
Construction
2,300
6.1%
7.5%3.6%
Austin-Round Rock Area
Goods Producing
900 Manufacturing
8,000
Local employment growth is strong compared to other markets
Employment growth has eased, but remains positive
Not Comparable
Drivers of Local Supply and Demand…
12-month change (2014 - Jun)
36-month change (2014 - Jun)9.2%13.7%
4.7%
6001,60011,900
5,300
Trade/Transportation/Utilities
Texas
NA Natural Resources and Mining Natural Resources/Mining/Construction
NA
Share of Total Employment by Industry
Natural Resources/Mining/Con
struct5.3% Manufacturi
ng5.9%
Trade/Transportation/U
tilities17.7%
Information2.7%
Financial Activities
5.5%Prof. & Business Services16.2%
Educ. & Health
Services11.1%
Leisure & Hospitality
12.1%
Other Services
4.4%
Government
19.1%
Natural Resources/Mining/Con
struct5.2%
Manufacturing
8.8%
Trade/Transportation/
Utilities19.1%
Information1.9%Financial
Activities5.8%
Professional &
Business Services14.0%
Educational & Health Services15.2%
Leisure & Hospitality
11.1%
Other Services
4.0%
Government
14.9%
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Construction is on the rise relative to last year, suggesting that the local
inventory has stabilized
The current level of construction is 14.1% above the long-term average
While new construction is the traditional driver of supply in real estate, foreclosures and short-sales now have a strong impact on inventories, particularly at the local level. Rising inventories, through construction or distressed sales, place downward pressure on the median home prices.
6.4%
not comparable
12-month Sum of 1-unit Building Permits through Jun 2014 10,510
Austin
not comparable
8-year average for 12-month Sum of 1-Unit Building Permits
Local Fundamentals
Single-Family Housing Permits (Jun 2014) 12-month sum vs. a year ago
Production above trend for an extended period of time could cause
prices to moderate as inventory is built
U.S.New Housing Construction
23.9%
9,213
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
State Total Foreclosure Rate vs. U.S Average(U.S. Average in Blue Dashed Line)
Source: Mortgage Bankers' Association
02,0004,0006,0008,000
10,00012,00014,00016,00018,00020,000
Construction: 12-month Sum of Local Housing Permits (Historical Average Shown in Red Dashed Line)
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Monthly Mortgage Payment to Income
Ratio for 2014 Q2Ratio for 2013
16.1%Historically strong, but weaker than the
first quarter of 201414.9%
2.6
Austin
Austin
Median Home Price to Income
11.1%
Affordability
12.7%
U.S.
Ratio for 2014 Q2
Ratio for 2013
Historical Average
U.S.1.92.2
2.72.7
More affordable than most markets20.3%12.9%
The price-to-income ratio is high by historic standards and getting worse
Affordable compared to most marketsHistorical Average 1.8
0%
5%
10%
15%
20%
25%
30%
2013201120092007200520032001199919971995
Long-Term Trend: Ratio of Local Mortgage Servicing Cost to Income (Local Historical Average Shown in Red, U.S. Average in Green)
0%2%4%6%8%
10%12%14%16%
2014 Q22014 Q12013 Q42013 Q32013 Q22013 Q12012 Q42012 Q3
Recent Trend - Local Mortgage Servicing Cost to Income(Historical Average Shown in Red Dashed Line)
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The Mortgage Market
Despite the continued wind-down of the Federal Reserve’s MBS and Treasury purchase program, mortgage rates remain low. The program was averaging $40 billion in purchases monthly of MBS issued by Ginnie Mae, Fannie Mae and Freddie Mac as well as $45 billion in US Treasury bonds prior to the taper. The intent was to place downward pressure on the long-term borrowing costs. Rates were anticipated to rise as the Fed withdrew its support. However, GDP fell sharply in the 1st quarter, outpacing already weak expectations for the quarter. Furthermore, continued instability in Europe with the conflict in Ukraine heating up as well as volatility in the Israel, Syria, and Iraq, coupled with lingering questions about the veracity of the US economy have kept rates low. Rates averaged roughly 4.25% in the 2nd quarter of 2014. The Fed will continue to taper its new purchases of MBS through the late summer ending this portion of the program in October. The Fed will continue to reinvest the principle of MBS and Treasuries indefinitely, though, which is supportive of the market. Rates will likely be more volatile in response to economic news without the robust Fed purchase volume or nascent expansion of private demand for agency MBS. Eventually, a stronger economy, be it robust or modest in nature, will drive up rates over the long-term. NAR is forecasting an average 30-year fixed rate of 4.5% for 2014, but to be 4.8% in the 4th quarter of 2014 and to average 5.3% for 2015.
0
40
80
120
160
200
240
280
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
2014 Q2Q42013 Q2Q42012 Q2Q42011 Q2Q42010 Q2Q42009 Q2
30-year Fixed Mortgage Rate and Treasury Bond Yield
Spread (left axis) 30-Year FRM (Right axis) 10-Year Treasury Bond (Right Axis)
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
2013201120092007200520032001199919971995
Ratio of Local Median Home Price to Local Average Income (Local Historical Average Shown in Red, U.S. Average in Green)
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More information on the OMB's geographic definitions can be found at http://www.whitehouse.gov/omb/inforeg_statpolicy/
Bastrop County, Caldwell County, Hays County, Travis County, and Williamson County
The Austin area referred to in this report covers the geographic area of the Austin-Round Rock metro area as officially defined by the Office of Management and Budget of the U.S. Government. The official coverage area includes the
following counties:
Geographic Coverage for this Report
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Local Price Trends
The Austin-Round Rock market is part of region 10 in the NAR governance system, which includes all of Louisiana and Texas. The 2014 NAR Regional Vice President representing region 10 is David McKey.
Local NAR Leadership
Note: limits are current and include the changes made in November of 2012 and extended in November of 2013
$38,1007-year (28 quarters) Housing Equity Gain*
$72,200
1-year (4-quarter) Appreciation (2014 Q1) 7.9%Prices are up from a year ago, but price
growth is slowing
Austin U.S.
$33,633
3-year (12-quarter) Appreciation (2014 Q1)8.9%
$50,100
21.3%3-year (12-quarter) Housing Equity Gain*
9-year (36 quarters) Housing Equity Gain*
Most buyers in this market have access to government-backed financing$305,900
U.S.
FHA Loan Limit
Price Activity$191,567$226,300
AustinCurrent Median Home Price (2014 Q1)
$625,500Local Median to Conforming Limit Ratio
$417,000
not comparable
-$22,533
Local Trend
*Note: Equity gain reflects price appreciation only
Gains in the last 3 years have extended the trend of positive price growth after
the recession-$8,000
54%
Conforming Loan Limit** $625,500
Austin-Round Rock AreaLocal Market Report, First Quarter 2014
Today's Market…
20.2%
$0
$50,000
$100,000
$150,000
$200,000
$250,000
-6%-4%-2%0%2%4%6%8%10%12%
2014Q1
Q32013Q1
Q32012Q1
Q32011Q1
Q32010Q1
Q32009Q1
Q32008Q1
Q32007Q1
Q32006Q1
Q32005Q1
Median Price (Red Line) and One-year Price Growth
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Benefits of Ownership: Total Equity Appreciation
Price Activity Austin U.S.$20,156 $18,699
Total Equity Gained** through 2014 Q1 from quarter in which home was of purchased
Local Trend
$40,5433-year (12-quarter)* $46,334Price appreciation and principle
payments in the last 3 years have boosted total equity growth since the
recession
*Note: Equity gain reflects price and principle payments since purchase, prevailing 30-year fixed rate mortgage at time of purchase and a 10% downpayment. Downpayment is not included in total equity
$3,658If purchase in 2005, the national price peak $93,028
9-year (36 quarters)* $93,028 $3,658
$57,6075-year (20-quarter)* $33,7897-year (28 quarters)* $66,397 $10,026
1-year (4-quarter)
$20,156
$56,710
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
2013 Q12011 Q12009 Q12007 Q12005 Q12003 Q12001 Q1
Total Equity Accrued to Owner by Year and Quarter of Purchase
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Natural Resour 5.0% 44.6 Natural 4.9%
#N/A #N/A #N/A #N/A
#N/A #N/A #N/A #N/A
Manufacturing 6.0% 52.8 Manufac8.7%
Trade/Transpo 17.7% 156.5 Trade/T 18.8%
Information 2.7% 23.6 Informa1.9%
Financial Act 5.6% 49.4 Financi5.7%
Prof. & Busin 15.7% 139.1 Profess13.8%
Educ. & Heal 11.4% 101.2 Educat 15.6%
Leisure & Ho 12.0% 106.6 Leisure10.5%Other Service 4.3% 38.5 Other S4.0%
Government 19.6% 173.2 95.0% Govern16.1% 100.0%#N/A #N/A #N/A #N/A#N/A #N/A #N/A #N/A
Information Financial Activities Prof. & Business Services Educ. & Health Services
Leisure & Hospitality
Service Providing Excluding Government Other Services
Government
Share of Total Employment by Industry
5002,1008,500
7,600
Trade/Transportation/Utilities
Texas
NA Natural Resources and Mining Natural Resources/Mining/Construction
NA
12-month change (2014 - Mar)
36-month change (2014 - Mar)8.8%13.9%
4.4%
Employment growth has eased, but remains positive
Not Comparable
Drivers of Local Supply and Demand…
12-month Employment Change by Industry in the Austin-Round Rock Area (Mar - 2014)
1,400
2,000
U.S.
U.S.
State Economic Activity Index
Construction
400
6.7%
7.5%3.8%
Austin-Round Rock Area
Goods Producing
1,200 Manufacturing
8,000
Local employment growth is strong compared to other markets
4.4%
5.3%
Current Unemployment Rate (Mar)
Local Economic Outlook Austin U.S.
97,500
32,500
Not Comparable
Unemployment in Austin is better than the national average and improving
Not Comparable
32,700
36-month Job Change (Mar)
The economy of Texas has outpaced the rest of the nation and improved modestly from last month's 4.19%
change
12-month Job Change (Mar)
2.9%
800
NA
NA
12-month Job Change (Feb)
Year-ago Unemployment Rate
1.7%1-year (12 month) Job Growth Rate
Natural Resources/Mining/Con
struct5.0% Manufacturi
ng6.0%
Trade/Transportation/U
tilities17.7%
Information2.7%
Financial Activities
5.6%Prof. & Business Services15.7%
Educ. & Health
Services11.4%
Leisure & Hospitality
12.0%
Other Services
4.3%
Government
19.6%
Natural Resources/Mining/Con
struct4.9%
Manufacturing
8.7%
Trade/Transportation/
Utilities18.8%
Information1.9%Financial
Activities5.7%
Professional &
Business Services13.8%
Educational & Health Services15.6%
Leisure & Hospitality
10.5%
Other Services
4.0%
Government
16.1%
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14.6%
9,488
Single-Family Housing Permits (Mar 2014) 12-month sum vs. a year ago
Production above trend for an extended period of time could cause
prices to moderate as inventory is built
U.S.New Housing Construction
14.2%
not comparable
12-month Sum of 1-unit Building Permits through Mar 2014 9,494
Austin
not comparable
8-year average for 12-month Sum of 1-Unit Building Permits
Local Fundamentals
While new construction is the traditional driver of supply in real estate, foreclosures and short-sales now have a strong impact on inventories, particularly at the local level. Rising inventories, through construction or distressed sales, place downward pressure on the median home prices.
The current level of construction is 00.1% above the long-term average
Construction is on the rise relative to last year, suggesting that the local
inventory has stabilized
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
State Total Foreclosure Rate vs. U.S Average(U.S. Average in Blue Dashed Line)
Source: Mortgage Bankers' Association
02,0004,0006,0008,000
10,00012,00014,00016,00018,00020,000
Construction: 12-month Sum of Local Housing Permits (Historical Average Shown in Red Dashed Line)
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Monthly Mortgage Payment to Income
Historical Average
U.S.1.92.0
2.72.5
More affordable than most markets20.3%12.5%
The price-to-income ratio is high by historic standards and getting worse
Affordable compared to most marketsHistorical Average 1.8
Affordability
11.8%
U.S.
Ratio for 2014 Q1
Ratio for 2013
Ratio for 2014 Q1Ratio for 2013
14.8%Historically strong, but weaker than the
fourth quarter of 201314.9%
2.6
Austin
Austin
Median Home Price to Income
11.1%
0%
5%
10%
15%
20%
25%
30%
2013201120092007200520032001199919971995
Long-Term Trend: Ratio of Local Mortgage Servicing Cost to Income (Local Historical Average Shown in Red, U.S. Average in Green)
0%
2%
4%
6%
8%
10%
12%
14%
2014 Q12013 Q42013 Q32013 Q22013 Q12012 Q42012 Q32012 Q2
Recent Trend - Local Mortgage Servicing Cost to Income(Historical Average Shown in Red Dashed Line)
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The Federal Reserve continued to taper its support for the housing market in the first quarter of 2014 at a pace of $5b fewer GSE MBS and Treasuries purchased each month. Over the prior year the Fed had purchased roughly $45 billion a month of mortgage backed securities from the GSEs and Ginnie Mae as well as 10-year Treasury bonds. These purchased pushed up on MBS prices, which in turn pushed mortgage rates lower. While the taper had a modest initial upward lift on rates, negative economic news, including weak employment gains, a decline in home sales and instability in Europe, more than offset the upward drift. What's more, the Fed still remains the dominant player in the market for MBS as the total volume of MBS has fallen faster than the rate of Fed purchases due to the sharp drop in refinancing in recent quarters. As a result, mortgage rates remained stable in the first quarter. The Fed will continue to taper through the spring which will have a moderate impact on rates so long as the economy remains in low gear and investor demand for agency MBS re-emerges. Eventually, a stronger economy, be it robust or modest in nature, will reemerge and the Fed's purchases will decline to a level that truly reduces it support for the market so rates will rise later this year. NAR is forecasting an average 30-year fixed rate of 4.7% for 2014, but to be 5.1% in the 4th quarter.
The Mortgage Market
0
40
80
120
160
200
240
280
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
2014 Q1Q32013 Q1Q32012 Q1Q32011 Q1Q32010 Q1Q32009 Q1
30-year Fixed Mortgage Rate and Treasury Bond Yield
Spread (left axis) 30-Year FRM (Right axis) 10-Year Treasury Bond (Right Axis)
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
2013201120092007200520032001199919971995
Ratio of Local Median Home Price to Local Average Income (Local Historical Average Shown in Red, U.S. Average in Green)
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More information on the OMB's geographic definitions can be found at http://www.whitehouse.gov/omb/inforeg_statpolicy/
Bastrop County, Caldwell County, Hays County, Travis County, and Williamson County
The Austin area referred to in this report covers the geographic area of the Austin-Round Rock metro area as officially defined by the Office of Management and Budget of the U.S. Government. The official coverage area includes the
following counties:
Geographic Coverage for this Report