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POPULATION OF MULTIFAMILY RENTERS EXPECTED TO GROW In a slow recovery, Freddie Mac expects to see further growth in the multifamily sector while the homeownership rate is projected to tick down from its already historically low level. According to the GSE's multifamily demand forecast, the homeownership rate will descend by one or two percentage points to around the 65 percent mark, which implies more than half of total new households, or 3.1 million families, will transition into rental units. On the other hand, the multifamily market is expected to reap somewhere around 1.7 million new renter households from 2011 to 2015. The projection is based on the assumption that the recovery continues at a slow pace. Using a pessimistic scenario that assumes no recovery, the report says multifamily demand would still hit 1.6 million, and the homeownership rate will slip by 1.4 percent from the current 65.5 percent. If the recovery were to push forward at an accelerated pace, about 1 million new multifamily renters are expected over the same period while the homeownership rate is projected to rise to the 1999-2000 level in 2015 as 4 million new homeowners are added. While both the single-family residential and multifamily markets were hurt during the most recent recession, the single-family market was more deeply impacted. Freddie Mac's report noted single-family home prices dropped 28 percent from their peak. The drop in prices also became a factor in the fall of the homeownership rate, which was 68.2 percent in 2007. The multifamily segment, however, benefits from the shrinking rate of homeowners. Freddie Mac says data from CBRE Econometric Advisors show commercial multifamily rent increased about 4.9 percent in 2011 while the vacancy rate dropped to the current level of 5 percent. In addition, the supply of new multifamily units is low with the Census Bureau showing that 167,000 units began construction in 2011, Freddie Mac noted. The number is well below the average volume of 260,000 units per year during 20012010. Freddie Mac explained that issues in the broader economy as well as credit conditions slowed new supply from entering the multifamily segment. Even though the number of new units in progress appears low, the report stated, "market participants need to keep an eye on new supply, especially in their local markets." The GSE also noted growth for the singlefamily rental market, which expanded 16 percent since 2007. Freddie Mac expects an increase of 1.4 million single-family renters if the recovery continues at a slow pace and 800,000 new single-family renters if the recovery accelerates into 2015. The analysis for the projections is based on several factors, such as unemployment, foreclosure, increased single-family supply, and home price growth. THE LEADER IN DEFAULT SERVICING NEWS CORELOGIC: SEPTEMBER SEES BIGGEST YEARLY PRICE GAIN SINCE 2006 Home prices in September posted their biggest yearly gain in more than six years, despite displaying the typical seasonal slowdown and falling monthover-month, according to CoreLogic's Home Price Index (HPI) report. The company's data showed home prices moved higher by 5 percent when compared to September 2011, marking the seventh straight month of yearly increases and the biggest annual gain since July 2006. From August to September, prices decreased by 0.3 percent. CoreLogic's pending HPI projects continued yearly gains into October, with prices expected to rise by 5.7 percent from October 2011. As the winter season sets in, prices are expected to continue moving downward and drop 0.5 percent month-over-month. Mark Fleming, chief economist for CoreLogic, said, "While prices on a month-over-month basis are 42 declining—as expected in the housing off-season— most states are exhibiting price increases. Gains are particularly large in former housing bubble states and energy-industry concentrated states." Anand Nallathambi, president and CEO of CoreLogic, added, "Home prices are responding to better market fundamentals, such as reduced inventories and improved buyer demand." Out of the 50 states, all but seven saw prices increase over the one-year period ending in September. The biggest annual gains were found in Arizona (+18.7 percent), Idaho (+13.1 percent), Nevada (+11.0 percent), Hawaii (+8.9 percent), and Utah (+8.7 percent). States that saw prices fall over the period were Rhode Island (-3.5 percent), Illinois (-2.3 percent), New Jersey (-1.8 percent), Alabama (-1.3 percent), Delaware (-0.5 percent), Kentucky (-0.4 percent), and Connecticut (-0.2 percent). Help shape the next issue of DS News. Drop us a line at Editor@DSNews.com.

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