Fannie Mae 2007 Annual Report Download - page 24

The table below provides overall housing and mortgage market statistics for 2007, 2006 and 2005.
Housing and Mortgage Market Data
(1)
2007 2006 2005
Home sales (units in thousands) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,426 7,529 8,359
Home price appreciation (depreciation) based on Fannie Mae House Price Index
(2)
. . . . . . (3.1)% 1.1% 12.9%
Home price appreciation (depreciation) based on OFHEO Purchase-Only House Price
Index
(3)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.3)% 4.1% 9.6%
Single-family mortgage originations (in billions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,488 $ 2,761 $ 3,034
Type of single-family mortgage origination:
Purchase share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50.1% 52.4% 49.8%
Refinance share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.9% 47.6% 50.2%
Adjustable-rate mortgage share
(4)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.8% 28.6% 32.4%
Fixed-rate mortgage share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82.2% 71.4% 67.6%
Residential mortgage debt outstanding (in billions)
(5)
. . . . . . . . . . . . . . . . . . . . . . . . . . . $ — $11,173 $10,036
(1)
The sources of the housing and mortgage market data in this table are the Federal Reserve Board, the Bureau of the
Census, HUD, the National Association of Realtors, the Mortgage Bankers Association and OFHEO. Single-family
mortgage originations, as well as the purchase and refinance shares, are based on February 2008 estimates from Fannie
Mae’s Economics & Mortgage Market Analysis Group. Certain previously reported data may have been changed to
reflect revised historical data from any or all of these organizations.
(2)
Fannie Mae calculates a House Price Index (“HPI”) quarterly using data provided by Fannie Mae, Freddie Mac and
other third party data on home sales. Fannie Mae’s HPI is a weighted repeat transactions index, meaning that it
measures average price changes in repeat sales on the same properties. House price appreciation (depreciation)
reported above reflects the percentage change in Fannie Mae’s HPI from the fourth quarter of the prior year to the
fourth quarter of the reported year.
(3)
OFHEO publishes a purchase-only House Price Index quarterly using data provided by Fannie Mae and Freddie Mac.
OFHEO’s HPI is a truncated measure because it is based solely on loans from Fannie Mae and Freddie Mac. As a
result, it excludes loans in excess of conforming loan amounts, or jumbo loans, and includes only a portion of total
subprime and Alt-A loans outstanding in the overall market. OFHEO’s HPI is a weighted repeat transactions index,
meaning that it measures average price changes in repeat sales on the same properties. House price appreciation
(depreciation) reported above reflects the percentage change in OFHEO’s HPI from the fourth quarter of the prior year
to the fourth quarter of the reported year.
(4)
The adjustable-rate mortgage share is the share of conventional mortgage applications that consisted of adjustable-rate
mortgages, as reported in the Mortgage Bankers Association’s Weekly Mortgage Applications Survey.
(5)
The Federal Reserve’s residential mortgage debt outstanding data as of December 31, 2007 was not available as of the
date of this report.
Mortgage and housing market conditions, which significantly affect our business and our financial
performance, worsened progressively through 2007. The housing market downturn that began in the second
half of 2006 continued through 2007 and is continuing in 2008. The most recent available data show
significant declines in new and existing home sales, housing starts and mortgage originations compared with
prior year levels. Overall housing demand decreased over the past year due to a slowdown in the overall
economy, affordability constraints, and declines in demand for investor properties and second homes, which
had been a key driver of overall housing activity. In addition, inventories of unsold homes have risen
significantly over the past year. The decreased demand and increased supply in the housing market has put
downward pressure on home prices. We estimate that home prices declined by 3.1% on a national basis during
2007. With weak housing activity and national home price declines, growth in total U.S. residential mortgage
debt outstanding slowed to an estimated annual rate of 8% in the first nine months of 2007, compared with
12% over the first nine months of 2006.
These challenging market and economic conditions caused a material increase in mortgage delinquencies and
foreclosures during 2007. The credit performance of subprime and Alt-A loans, as well as other higher risk
loans, has deteriorated sharply during the past year, and even the prime conventional portion of the mortgage
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