Market Trends & Solutions to Help You Win

Employment & Unemployment Rate

Source: BLS, Moody’s Analytics

Local employment risingNorth Carolina Employment Stats South Carolina Employment Stats

Virginia Employment Stats Georgia Employment Stats

Source: BLS

Local employment risingMichigan Employment Stats Ohio Employment Stats

Indiana Employment Stats Illinois Employment Stats

Source: BLS

Local unemployment falling

Source: BLS

Local unemployment falling

Source: BLS

Labor… it is a challenge

Consumer Confidence UP

Wages, Disposable Income & Affordability

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Income Retention vs. Affordability

Affordability Index Real Disposable Personal Income Wage and Salary Growth

Source: U.S. Department of Housing and Urban Development;

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U.S. Median Asking Sales Price

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2013 2014 2015 2016 2017 2018

U.S. Median Asking Rent

Rising Cost of Housing

~29% increase in monthly rent

~63% increase in listing price

Mortgage rates

Forecasts call for the 30 year mortgage rate to be in the 5% range for 2019

Source: Google, Kiplinger

Mortgage Rate effect on Consumers

Population

3,500,000

3,700,000

3,900,000

4,100,000

4,300,000

4,500,000

4,700,000

4,900,000

18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Average age first-time

homebuyer

Largest Age Cohort

Average age repeat

homebuyer

Number of people in 2017

~55% live with parents

~20% live with parents

21 25 30 35 40

Population dynamics drive demand trends

Changes in population affect the market

Know your homeowner by lifestage

Target markets for the greatest growth

NEW CONSTRUCTION

Home prices can seem high vs expectations

Lack of developed lots slows building

Housing gap

Source: US Bureau of the Census

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Housing Units v. Households (Seasonally Adjusted)

Household Estimates New Privately Owned Housing Starts New Private Housing Units Authorized by Building Permits

Housing Stock vs. Occupancy

Housing starts up SF is the driver

Macro Housing Data outlook

2013 2014 2015 2016 2017 2018 2019 2020Construction Market

Housing Starts - Total (Thous.) 927 1,000 1,108 1,173 1,202 1,310 1,375 1,400% Change 18% 8% 11% 6% 2% 9% 5% 2%

Single Family Starts (Thous.) 619 646 713 781 848 940 990 1,020% Change 16% 4% 10% 10% 9% 11% 5% 3%

Multi Family Starts (Thous.) 308 354 395 392 354 370 385 380% Change 25% 15% 12% -1% -10% 5% 4% -1%

Single Family % of Total Starts 67% 65% 64% 67% 71% 72% 72% 73%

Building Permits - Total (Thous.) 994 1,052 1,182 1,206 1,281 1,406 1,555 1,598% Change 20% 6% 12% 2% 6% 10% 11% 3%

Single Family permits (Thous.) 624 640 695 750 819 930 1,118 1,170% Change 20% 2% 9% 8% 9% 13% 20% 5%

Multi Family Permits (Thous.) 370 412 487 456 462 476 437 428% Change 19% 11% 18% -6% 1% 3% -8% -2%

Macro Indicators: ResidentialUS

ForecastActual

CT MarketCheck2.0

Housing Starts: Local

Housing Stock: Local

Housing Starts: Local

Housing Stock: Local

New Construction Drivers of Success

• Know your market & target customer

• Affordability

• Focus on labor efficiency– Production– Quality– Products

REPAIR & REMODEL

Existing Home Sales

Housing prices up; housing supply low

Source: St. Louis Fed (FRED)

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Housing Inventory

Monthly Supply of Houses Median Sales Price for New Houses 30 Year Mortgage Rate

Home Improvement continues to grow

278.0 279.0 284.4 290.3 295.2 297.0 302.3 308.0 313.6 316.9 323.5330.7 336.9 339.5 346.2 352.9 354.2

5.1%4.5%

5.0%5.7% 6.2% 6.4% 6.3% 6.1% 6.2% 6.7% 7.0% 7.4% 7.5% 7.2% 7.0% 6.7%

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$225

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Historical Estimates LIRA Projections

Homeowner Improvements & Repairs; Four-Quarter Moving Totals (Billions)

Note: Historical estimates since 2015 are produced using the LIRA model until American Housing Survey data become available.Source: Joint Center for Housing Studies.

Remodelers feel good about the market

Source: NAHB

Remodeling forecast continues to grow

Source: Metrostudy

Remodeling Drivers of Success

• Positives– Aging housing stock– Real income growth– Home equity lending– Home price appreciation

• Negatives– Existing home sales volumes– Labor constraints/costs

Thank you!