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37 » VISIT US ONLINE @ DSNEWS.COM THE SHIFTING SENTIMENTS IN HOUSING e dynamics of the housing market, which had grown over the past few years fueled by high demand, limited inventory, and low mortgage rates, shifted gears at the end of 2018, according to a study by Trulia that looked at how last year shaped the 2019 outlook of homebuyers, sellers, and renters. e study, which surveyed more than 2,000 adults across the U.S. revealed that while Americans still dream of owning a home, the dream was getting more distant for younger adults who made up the biggest chunk of first-time buyers. Home sellers were also less optimistic as home price appreciation slows. Despite the spate of natural disasters in 2017 and last year, the study found that the fear of wildfires, hurricanes, tornados, and floods aren't deterring homebuyers. In fact, 52 percent of those surveyed said that they are no more or less concerned than in past years about the potential threat of natural disasters affecting their home. What they are less optimistic about, however, is the overall housing market, the study found. Even though they intend to buy a home regardless of the current housing market trends, 19 percent of those surveyed said they would do so only next year, up from 16 percent a year ago. However, a majority (60 percent) said they planned to wait until after 2020 to buy a home. Among home sellers, 29 percent said they believed 2019 would be a better year to sell than 2018, compared to 21 percent who said next year would be worse than 2018. However, last year American home sellers were much more bullish on selling, the study revealed, with 31 percent saying this year would be better than last. As to what would be a key factor to hold back homebuyers this year, the study listed money as a key challenge for would-be homeowners. Nearly all (92 percent) of the U.S. renters surveyed said that while they wished to buy, they perceived barriers in homeownership related to personal finances. TRENDS IN GSE CREDIT RISK TRANSFERS In its latest "GSE CRT Loss Projection" report, Fitch Ratings revealed that their reference pool loss projections have lowered on every transaction compared to their prior review in July 2018. At the "BBBsf ' rating stress level, projected losses were revised downward by an average of 15 basis points (bps) as a percentage of the remaining mortgage loan pool balance. e declining projected losses reflect strong collateral performance, increased home price appreciation, and a shorter remaining period until transaction maturity," the report stated. e GSE CRT Loss Projection report is published every six months in January and June detailing the projections for future credit events and losses on mortgage loan pools referenced by GSE credit risk transfer transactions. e report points out to an increase in overall as well as early delinquency trends among recent transactions—a higher trajectory compared to prior vintages. It indicated the trend remains better than initial expectations even for recently issued transactions. According to the report, the average 60-plus day delinquency percentage for 60 percent to 80 percent loan-to-value (LTV) reference pools is 25bps among transactions with at least 12 months seasoning. No pool was higher than 56bps in this category, it said. For 81 percent to 97 percent LTV reference pools, the average is 44bps, with no pool higher than 90bps. Fitch also highlights a 2 percent average increase in prices since the last review in July. "e resulting lower mark-to-market LTV ratios of the reference pools have driven current loss expectations lower relative to deal closing," the report adds. According to the report, voluntary mortgage insurance (MI) cancellations were higher than expected. "For borrowers who are eligible to cancel but have not yet done so," the report reads, "Fitch increased the haircut to the MI benefit to reflect the possibility that they could cancel sooner than the model currently expects." e report also indicated that all GSE CRT transactions reviewed have a hard bullet maturity date of 10 years or 12.5 years from issuance, depending on the transaction. is the average retention rate for expiring leases on single- family rentals. Source: Morningstar Credit Ratings STAT INSIGHT 78.7%

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