Housing Forecast: February 2015

ECONOMIC AND STRATEGIC RESEARCH

14.1 14.2 14.3 14.4 15.1 15.2 15.3 15.4 16.1 16.2 16.3 16.4 2014 2015 2016

Housing Starts and Sales (SAAR, Thous. Units)

Housing Starts 925 985 1,030 1,075 1,085 1,130 1,180 1,225 1,245 1,315 1,350 1,365 1,006 1,155 1,319

Single-Family (1 Unit) 602 625 652 708 700 740 790 830 850 920 950 965 648 765 921

Percent Change: Year-over-Year 4.9% 18.1% 20.4%

Multifamily (2+ Units) 323 360 378 367 385 390 390 395 395 395 400 400 358 390 398

New Single-Family Home Sales 431 427 434 458 479 495 520 549 580 618 640 651 435 511 622

Percent Change: Year-over-Year 1.4% 17.5% 21.8%

Total Existing Home Sales (Single-Family, Condos and Co-Ops) 4,603 4,867 5,120 5,070 5,095 5,130 5,174 5,193 5,210 5,256 5,266 5,318 4,930 5,148 5,262

Percent Change: Year-over-Year -3.1% 4.4% 2.2%

Total Home Sales (New + Existing) 5,034 5,294 5,554 5,528 5,574 5,625 5,694 5,742 5,790 5,875 5,906 5,968 5,365 5,659 5,885

Percent Change: Year-over-Year -2.8% 5.5% 4.0%

Home Prices (NSA, Thous. $)

Median New 274 282 278 295 286 293 288 309 299 304 299 320 284 294 306

Median Total Existing 191 212 216 208 200 220 225 217 208 228 233 226 209 215 224

FHFA Purchase-Only Index (Percent Change: Quarterly YoY, Annual Q4/Q4) 6.9% 5.6% 4.6% 4.7% 4.7% 3.8% 4.1% 4.6% 4.6% 4.0% 3.9% 4.0% 4.7% 4.6% 4.0%

Mortgage Rates (Percent)

30-Year Fixed Rate Mortgage 4.4 4.2 4.1 4.0 3.7 3.8 3.9 4.0 4.1 4.2 4.2 4.3 4.2 3.8 4.2

5-Year Adjustable Rate Mortgage 3.1 3.0 3.0 3.0 2.9 3.0 3.1 3.3 3.4 3.5 3.6 3.7 3.0 3.1 3.6

1-Year Adjustable Rate Mortgage 2.5 2.4 2.4 2.4 2.4 2.5 2.7 2.8 2.9 3.0 3.2 3.2 2.4 2.6 3.1

Single-Family Mortgage Originations (NSA, Bil. $, 1-4 Units)

Mortgage Originations 240 312 336 305 266 360 342 309 291 339 320 290 1,193 1,277 1,239

Purchase 123 190 194 169 129 197 198 180 144 217 218 200 676 703 779

Refinance 116 122 142 136 138 163 144 129 147 122 102 90 516 574 460

Refinance Share (%) 49% 39% 42% 45% 52% 45% 42% 42% 51% 36% 32% 31% 43% 45% 37%

Liquidations 261 318 317 293 250 336 311 296 270 264 259 255 1,189 1,193 1,048

Mortgage Debt Outstanding (NSA, Bil. $)

MDO Single-Family First Lien (1-4 Units) 9,162 9,157 9,176 9,187 9,204 9,227 9,258 9,271 9,292 9,367 9,427 9,462 9,187 9,271 9,462

Percent Change: Quarterly Annualized Rate, Annual Q4/Q4 -0.9% -0.2% 0.8% 0.5% 0.7% 1.0% 1.3% 0.6% 0.9% 3.3% 2.6% 1.5% 0.0% 0.9% 2.1%

MDO Total Single-Family (1-4 Units) 9,853 9,841 9,855 9,862 9,880 9,907 9,942 9,957 9,982 10,065 10,133 10,173 9,862 9,957 10,173

Percent Change: Quarterly Annualized Rate, Annual Q4/Q4 -1.4% -0.5% 0.6% 0.3% 0.7% 1.1% 1.4% 0.6% 1.0% 3.4% 2.7% 1.6% -0.2% 1.0% 2.2%

Adjustable Rate Mortgage Share of Conventional Mortgage Applications (%) 9% 10% 9% 9% 7% 7% 7% 7% 7% 7% 7% 7% 9% 7% 7%

February 10, 2015

Note: Interest rate forecasts are based on rates from January 30, 2015.

Note: All mortgage originations data are Fannie Mae estimates as there is no universal source for market-wide originations data.

Note: Unshaded areas denote actuals. Shaded areas denote forecasts.

Sources: Actuals: Census Bureau, National Association of REALTORS®, Federal Housing Finance Agency, Freddie Mac, Federal Reserve Board. Forecasts: Fannie Mae Economic & Strategic Research (ESR) group

Opinions, analyses, estimates, forecasts, and other view s of Fannie Mae's ESR group included in these materials should not be construed as indicating

Fannie Mae's business prospects or expected results, are based on a number of assumptions, and are subject to change w ithout notice. How this information affects Fannie Mae w ill depend

on many factors. Although the ESR group bases its opinions, analyses, estimates, forecasts, and other view s on information it considers reliable, it does not guarantee that the information provided

in these materials is accurate, current or suitable for any particular purpose. Changes in the assumptions or the information underlying these view s could produce materially different results.

The analyses, opinions, estimates, forecasts, and other view s published by the ESR group represent the view s of that group as of the date indicated and do not necessarily represent the view s

of Fannie Mae or its management.

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