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54 WILL HOUSING OVERCOME ECONOMIC SLOWDOWNS? e pace of sales of existing homes slowed down in June, but is sill up from May and from last year, according to early projections from Ten-X Residential Real Estate Nowcast. e company expects June's existing-home sales will fall between seasonally adjusted annual rates of 5.38 and 5.74 million, with a targeted number of 5.56 million. at's an increase of 0.5 percent increase from May and a 1.4 percent year-over-year gain. e Nowcast also called for an increase in May sales between 5.47 and 5.83 million units, with a target of 5.65. Ten-X's outlook was based on May figures on existing-home sales issued by the National Association of Realtors (NAR), which recently reported a 4.5 percent year-over-year increase in sales to 5.53 million units in May. at increase over April marked the highest annual sales rate since February of 2007. e NAR also reported a 4.7 percent year- over-year increase in median existing-home prices to $239,700 for May, marking the 51st consecutive month of year-over-year gains and nearly matching the prediction of $238,418 that Ten-X made in the Nowcast. Findings from the Nowcast suggest that sales prices for existing homes will fall between $231,642 and $256,025 in June, with a targeted price of $243,833. is represents a 1.7 percent month- over-month gain and a 3.1 percent year-over- year gain. "Despite facing broader economic headwinds following a disappointing May jobs report, slowing U.S. GDP growth, and uncertainty in global markets, the U.S. housing market remains on solid footing," said Ten-X Chief Economist Peter Muoio. "We continue to hold a positive outlook for housing supported by accelerating wage growth, an accommodative labor market and low interest rates, though persistent issues with declining affordability and low inventory will likely limit stronger gains in sales." Like many in the U.S. housing market of late, Rick Sharga, EVP and Chief Marketing Officer at Ten-X, is wondering how the U.K.'s Brexit vote to leave the European Union will play out. "It will be interesting to see if the recent Brexit vote will have a measurable near-term impact on the U.S. housing market," Sharga said. "We could see interest rates reach a new low, possibly stimulating buying activity by improving affordability. Or we could see an influx of foreign capital, as investors look towards U.S. real estate in a flight to safety. Either of these could significantly change the current market trajectory." TREASURY: GE CAPITAL NO LONGER TOO BIG TO FAIL e U.S. Treasury's Financial Stability Oversight Council (FSOC) rescinded its determination that GE Capital Global Holdings is too big to fail. According to the announcement, the FSOC pulled its determination that "material financial distress at [GE Capital] could pose a threat to U.S. financial stability" and decided that the firm should be subject to supervision by the Federal Reserve System and enhanced prudential standards. e FSOC originally designated GE Capital in July 2013, and since then the company has "executed significant divestitures, transformed its funding model, and implemented a corporate reorganization," according to statement. "As a result, the company is a much less significant participant in U.S. financial markets and the economy" and, therefore, does not pose a significant threat for bailout the way it once did. In 2008, the FDIC backed $139 billion in capital debt for GE; a year ago, the embattled company announced it would dismantle much of its financial services and sell off most of GE Capital, a $500 billion lending business at the time. According to the Treasury, GE Capital was a significant source of credit to the U.S. economy, "providing financing to more than 243,000 commercial customers, 201,000 small businesses through retail programs, and 57 million consumers." After selling off nearly $168 billion of an intended $200 billion in assets, GE's impact on U.S. financial markets has been greatly minimized. "e decision clearly demonstrates that the Council's designation of nonbank financial companies is a two-way process," said Treasury Secretary Jacob Lew. "e Council follows the facts: When it identifies a company that could threaten financial stability, it acts; when those risks change, the Council also acts." Treasury's decision somewhat flies in the face of its plan to fight the removal of the "significantly important financial institutions," or SIFI, designation from MetLife. Judge Rosemary Collyer, in the U.S. District Court in the District of Columbia, recently ruled in a sealed opinion that the SIFI tag should be removed from MetLife, stating that the government body that applied the designation used a "fatally flawed" process. Treasury disagreed and plans to appeal the decision. MetLife had sued the FSOC in January 2015 to have the SIFI designation removed, because as a nonbank SIFI, MetLife said it would be subject to heightened regulation which the company says will increase compliance costs, hence increasing costs to consumers without any added safety benefit for the financial system. The number of months of consecutive year-over- year declines in foreclosure inventory. Source: CoreLogic STAT INSIGHT 55

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