Thomvest Housing Market Overview, December 2022

U.S. Housing Market Health Check
Thomvest Ventures Research
Key economic indicators in America’s residential real estate market
Prepared by Nima Wedlake
December 2022

I. Housing Affordability & Supply

The Schiller National
Home Price Index has
far exceeded pre-
Great Recession levels
S&P/Case-Shiller U.S. National Home Price Index, 1990
-
2022
- Home prices have grown rapidly in
the years following the Great
Recession.
- Home prices dropped about 35%
between mid-2006 and early 2009
in the first nationwide decline since
the Great Depression. They have
since recovered, and are now at
more than 150% of their prior peak
level in 2007.
- Despite rising interest rates,
existing-home sales prices grew in
nearly every measured metro area
–
181 of 185
–
in the Q3 2022.
- Compared to a year ago, the
national median single-family
existing-home price rose 8.6% to
$398,500 between Q3 2021 and Q3
2022.
Source: S&P Dow Jones Indices LLC
80
120
160
200
240
280
320
1
9
9
0
1
9
9
1
1
9
9
2
1
9
9
3
1
9
9
4
1
9
9
5
1
9
9
6
1
9
9
7
1
9
9
8
1
9
9
9
2
0
0
0
2
0
0
1
2
0
0
2
2
0
0
3
2
0
0
4
2
0
0
5
2
0
0
6
2
0
0
7
2
0
0
8
2
0
0
9
2
0
1
0
2
0
1
1
2
0
1
2
2
0
1
3
2
0
1
4
2
0
1
5
2
0
1
6
2
0
1
7
2
0
1
8
2
0
1
9
2
0
2
0
2
0
2
1
2
0
2
2
184.6
July ’06
19% CAGR
12% CAGR
274.6
June ’22
Great Recession, 2007
—
2009
COVID
-
19 Pandemic, Q2 2020
—
Today

Many U.S. markets
experienced explosive
year-over-year growth
in home values in 2021
Year-over-Year Home Price Index Growth by U.S. Metro
Source: Zillow Home Value Index
(
ZHVI
)
Austin, TX
Boise City, ID
Phoenix, AZ
Stockton, CA
Spokane, WA
Reno, NV
Salt Lake City, UT
Raleigh, NC
San Diego, CA
Las Vegas, NV
Sacramento, CA
Dallas, TX
Nashville, TN
Denver, CO
San Francisco, CA
10% 20% 30% 40% 50%
17%
22%
23%
23%
24%
25%
25%
28%
28%
29%
29%
30%
33%
42%
44%
- All major U.S. metros experienced
growth in home values, but smaller
metro areas such as Boise, Idaho
and Austin, Texas experienced the
most meaningful growth, driven by
homebuyer demand for more space
and relative value.
- While home price appreciation has
slowed in 2022, many markets are
still experience double-digit year-
over-year growth.
- Many credit the rise of remote work
as a key driver of price appreciation
in these markets. Realtor.com Chief
Economist Danielle Hale:
“This past year, we’ve all become
more reliant on technology to work,
learn, and maintain personal
connections. The technology hubs
that make this possible are thriving,
as are their housing markets,” 10% 20% 30% 40% 50%
3%
10%
22%
18%
5%
14%
10%
18%
8%
4%
10%
6%
10%
0%
6%
Home Price Growth
Oct. ’20
—>
Oct. ‘21
Home Price Growth
Oct. ’21
—>
Oct. ‘22

U.S. Mortgage Affordability
(
% of Median Income), 1990
-
2022
Housing affordability
has plummeted in
2022, driven by rising
mortgage rates
- While home prices have increased,
mortgage costs as a percentage of
household income actually declined
relative to Great Recession levels.
- Mortgage costs relative to median
income dropped below 15% in 2020,
driven by declining mortgage rates.
- Since then, housing affordability has
plummeted to its lowest point in at
least 15 years, with many of the
country’s most affordable cities
pulled into the crisis.
5%
10%
15%
20%
25%
30%
Q
3
1
9
9
0
Q
3
1
9
9
2
Q
3
1
9
9
4
Q
3
1
9
9
6
Q
3
1
9
9
8
Q
3
2
0
0
0
Q
3
2
0
0
2
Q
3
2
0
0
4
Q
3
2
0
0
6
Q
3
2
0
0
8
Q
3
2
0
1
0
Q
3
2
0
1
2
Q
3
2
0
1
4
Q
3
2
0
1
6
Q
3
2
0
1
8
Q
3
2
0
2
0
Q
3
2
0
2
2
23.9% in Q3 2006
Source: National Association of Realtors
—
2009
COVID
-
—
Today
14.8% in Q4 2020
25.3% in Q4 2022

For Sale Housing Inventory (in Millions) by Month, 2012
-
2022
Homes available for
sale are at multi-year
lows, exacerbating
housing supply issues
- The number of homes for sale in the
U.S. reached a multi-decade low in
2021, driven by the rapid pace of
existing home sales combined with
the limited inventory of newly
constructed homes.
- Listing growth has been impacted
by rising interest rates, as many
existing home owners opt to stay in
their homes in order to preserve
their low interest mortgages.
0.5M
1.0M
1.5M
2.0M
2.5M
J
u
l
2
0
1
2
J
a
n
2
0
1
3
J
u
l
2
0
1
3
J
a
n
2
0
1
4
J
u
l
2
0
1
4
J
a
n
2
0
1
5
J
u
l
2
0
1
5
J
a
n
2
0
1
6
J
u
l
2
0
1
6
J
a
n
2
0
1
7
J
u
l
2
0
1
7
J
a
n
2
0
1
8
J
u
l
2
0
1
8
J
a
n
2
0
1
9
J
u
l
2
0
1
9
J
a
n
2
0
2
0
J
u
l
2
0
2
0
J
a
n
2
0
2
1
J
u
l
2
0
2
1
J
a
n
2
0
2
2
J
u
l
2
0
2
2
2.16M Listings in May 2012
Source: Redfin
867K Listings in Oct. 2022
COVID
-
—
Today

600
1,200
1,800
2,400
3,000
1
9
8
0
1
9
8
2
1
9
8
4
1
9
8
6
1
9
8
8
1
9
9
0
1
9
9
2
1
9
9
4
1
9
9
6
1
9
9
8
2
0
0
0
2
0
0
2
2
0
0
4
2
0
0
6
2
0
0
8
2
0
1
0
2
0
1
2
2
0
1
4
2
0
1
6
2
0
1
8
2
0
2
0
2
0
2
2
Annual U.S. Housing Construction Starts (in Thousands of Units), 1980
-
2022
New construction
starts have yet to
recover following the
Great Recession
- Lack of new housing supply is a
major contributor to home price
appreciation — housing completions
have trailed household growth in
every year since following the Great
Recession.
- 12.3 million U.S. households were
formed from January 2012 to June
2021, but just 7 million new single-
family homes were built during that
time.
- Supply chain issues caused by the
pandemic have also impacted the
pace of construction, according to
Pulte CEO Ryan Marshall:
“Shortages for a variety of building
products, combined with increased
production volumes across the
homebuilding industry, are directly
impacting our ability to get homes
closed to our level of quality over
the remainder of the year.”
2.1M Starts
2005
1.21M
Avg. yearly starts, 2012
-
2022
1.79M
Avg. yearly starts, ’00
-
'06
Source: Federal Reserve Bank of St. Louis
1.6M Starts
2022

U.S. Age Distribution (in Millions), 2021
3.5M
4.0M
4.5M
5.0M
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
4.8M
30 y/os
4.4M
33 y/os
An impending boom in
first-time buyers may
drive continued
demand for housing
- The median age of a first time
homebuyer is 33
—
there are 4.4
million 33 year-olds in the U.S. vs.
more than 4.8 million 29 year-olds.
- As Americans in their late twenties
age into the home purchase market
over the next 2
-
4 years, we expect
a period of sustained housing
demand.
- However, we also expect
accelerated supply of properties
over the next decade as baby
boomers transition out of their
homes.
Median Age of First-
Time Homebuyer
Source: U.S. Census Bureau, Population Division; Population estimate as of July 2020

Indicators of Mortgage Borrower Credit Quality, 2007 vs. 2020
The housing market
was “healthier” prior to
the pandemic vs. the
period preceding the
Great Recession
- In Q1 2020, homeowners were in
stronger equity positions relative to
2007
—
fewer had mortgages
(
62%
vs. 68%
)
and those that did had a
lower loan-to-value ratio
(
53.3% vs.
61.8%
)
.
- There were fewer high-risk
mortgage products in 2020 vs 2007,
including 60% fewer subprime loans
and 75% fewer adjustable rate
mortgages.
- The mortgage payment to income
ratio was lower in 2020 relative to
2007
(
20.9% vs. 31.8%
)
- The roughly 7.5M homeowners
who've been in a forbearance plan
at some point since the start of the
pandemic represent 15% of all
mortgaged properties
Metric Great Recession
(
Entering 2007
)
COVID
-
19
(
February 2020
)
Percent of Homeowners w/ a Mortgage 68.4% 62.9%
Number of Active Mortgages 53.7M 52.9M
Percent of Homeowners w/ Less Than 10% Equity 14.5% 6.6%
Total Market CLTV 57.4% 52.3%
Average Current CLTV 61.8% 53.3%
Average DTI at Origination 34.5 33.5
Average Original Credit Score 708 736
Average Current Credit Score 713 747
Mortgage Delinquency Rate 4.92% 3.28%
Mortgage Payment to Income Ratio 31.8% 20.9%
Number of Active Subprime Loans 5.1M 1.98M
Number of Active ARM Mortgages 12.89M 3.2M
ARM Mortgages Scheduled to Reset w/in 3 Years 4.95M 320K
GNMA/GSE Share 63% 75%
Source: Black Knight & Urban Institute

Mortgages rates have
swung meaningfully
upwards in 2022,
reaching nearly 7%
Average Rate for Conforming 30
-
Year Fixed Rate Mortgage, 1972
-
2022
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
1
9
7
2
1
9
7
4
1
9
7
6
1
9
7
8
1
9
8
0
1
9
8
2
1
9
8
4
1
9
8
6
1
9
8
8
1
9
9
0
1
9
9
2
1
9
9
4
1
9
9
6
1
9
9
8
2
0
0
0
2
0
0
2
2
0
0
4
2
0
0
6
2
0
0
8
2
0
1
0
2
0
1
2
2
0
1
4
2
0
1
6
2
0
1
8
2
0
2
0
2
0
2
2
- This rise in interest rates has
impacted home affordability and
transaction volume in 2022.
- For context, every 100 basis point
increase in mortgage interest rate
decrease “buying power” by
~
15%
— meaning prospective buyers can
no longer afford to purchase more
expensive homes.
6.9% in Oct. 2022
6.6% in June 2007
Source: Freddie Mac
2.7% in Dec. 2020
—
2009
COVID
-
—
Today

$1T
$2T
$3T
$4T
$5T
2
0
0
2
2
0
0
3
2
0
0
4
2
0
0
5
2
0
0
6
2
0
0
7
2
0
0
8
2
0
0
9
2
0
1
0
2
0
1
1
2
0
1
2
2
0
1
3
2
0
1
4
2
0
1
5
2
0
1
6
2
0
1
7
2
0
1
8
2
0
1
9
2
0
2
0
2
0
2
1
2
0
2
2
Purchase Volume Refinance Volume
Annual U.S. Mortgage Origination Volume by Type (in Billions, USD
)
, 2002
-
2024
Mortgage Originations
Spiked in 2020 & 2022
Driven by Record-Low
Interest Rates
- In Q3 2022, mortgage origination
declined 47% from the third quarter
of 2021
–
the biggest annual drop in
21 years.
- This drop is a result of rising
mortgage interest rates, which have
increased at the fastest rate since
the early 1980s.
- Fannie Mae expects origination
volume to drop further in 2023 to
$1.8T.
Source: Fannie Mae
$4.6T in Originations in 2021
Refinance:
(
74%
)
Y/Y
Purchase:
(
14%
)
Y/Y
$2.3T
2
0
2
3
E
2
0
2
4
E
$1.7T
$2.1T

2M
3M
5M
6M
8M
1
9
9
8
2
0
0
0
2
0
0
2
2
0
0
4
2
0
0
6
2
0
0
8
2
0
1
0
2
0
1
2
2
0
1
4
2
0
1
6
2
0
1
8
2
0
2
0
2
0
2
2
Annual U.S. Existing Home Sales
(
Units Sold), 1989
-
2022
Annual Sales of Single
Family Homes in the
U.S. is Expected to
Drop by 16% in 2022
- In October 2022, existing-home
sales fell for the ninth month in a
row to a seasonally adjusted annual
rate of 4.43 million.
- Sales fell 5.9% from September and
28.4% from one year ago, driven by
rising mortgage rates which impacts
home affordability.
- The share of homes purchased by
first-time homebuyers was 26%, a
multi-decade low.
- Fannie Mae forecasts 3.9M existing
home sales in 2023, a 23% Y/Y
decline.
Source: National Association of Realtors
7.1M Homes
5.1M Homes
(
16%
)
Y/Y
2022 Existing Home Sales Run-Rate
4M
5M
6M
7M
J
a
n
F
e
b
M
a
r
A
p
r
M
a
y
J
u
n
J
u
l
A
u
g
S
e
p
O
c
t
N
o
v
6.5M
4.3M

200
400
600
800
1000
2
0
0
5
2
0
0
6
2
0
0
7
2
0
0
8
2
0
0
9
2
0
1
0
2
0
1
1
2
0
1
2
2
0
1
3
2
0
1
4
2
0
1
5
2
0
1
6
2
0
1
7
2
0
1
8
2
0
1
9
2
0
2
0
2
0
2
1
2
0
2
2
Mortgage Credit Availability Index, 2004
-
2022
102.0 in Oct. 2022
Peak of 868.7 in June 2006
Credit availability
dropped at the start of
the pandemic & is well
below pre-GFC highs
- The Mortgage Credit Availability
Index is calculated using several
factors related to borrower eligibility
(credit score, loan type, loan-to-
value ratio, etc.).
- Credit availability spiked prior to the
Great Recession, and declined
sharply due to regulatory changes,
as well as updates to bank
underwriting policies.
- The Credit Availability Index
dropped sharply in March 2020, as
a result of tightening credit
standards during the COVID
-
19
pandemic.
- The Index has tightened even
further in 2022 as GSEs have pulled
back from the mortgage markets.
Source: Mortgage Bankers Association
—
2009
COVID
-
—
Today

Quarterly U.S. Mortgage Originations (in Billions, USD
)
, 2003
-
2022
$300B
$600B
$900B
$1,200B
$1,500B
Q
3
2
0
0
3
Q
3
2
0
0
4
Q
3
2
0
0
5
Q
3
2
0
0
6
Q
3
2
0
0
7
Q
3
2
0
0
8
Q
3
2
0
0
9
Q
3
2
0
1
0
Q
3
2
0
1
1
Q
3
2
0
1
2
Q
3
2
0
1
3
Q
3
2
0
1
4
Q
3
2
0
1
5
Q
3
2
0
1
6
Q
3
2
0
1
7
Q
3
2
0
1
8
Q
3
2
0
1
9
Q
3
2
0
2
0
Q
3
2
0
2
1
Q
3
2
0
2
2
$1.06T in Q3 2003
Mortgage origination
volume skyrocketed in
2020 due to record-
low interest rates
- Mortgage originations spiked in the
years preceding the Great
Recession, driven by relaxed credit
standards and an active housing
market.
- In Q2 2021, origination volume
reached a record level of $1.22T,
surpassing volumes seen prior to
the Great Recession.
- Originations have dropped
meaningfully in 2022 driven by a
steep rise in mortgage interest
rates.
Source: New York Fed Consumer Credit Panel/Equifax
$1.22T in Q2 2021
—
2009
COVID
-
—
Today
$632B in Q3 2022

$300B
$600B
$900B
$1,200B
$1,500B
Q
3
2
0
0
3
Q
3
2
0
0
4
Q
3
2
0
0
5
Q
3
2
0
0
6
Q
3
2
0
0
7
Q
3
2
0
0
8
Q
3
2
0
0
9
Q
3
2
0
1
0
Q
3
2
0
1
1
Q
3
2
0
1
2
Q
3
2
0
1
3
Q
3
2
0
1
4
Q
3
2
0
1
5
Q
3
2
0
1
6
Q
3
2
0
1
7
Q
3
2
0
1
8
Q
3
2
0
1
9
Q
3
2
0
2
0
Q
3
2
0
2
1
Q
3
2
0
2
2
<
620 620
-
659 660
-
719 720
-
759 760
+
15%
30%
45%
60%
75%
% Originations 760
+
Quarterly U.S. Mortgage Originations by Credit Score (in Billions, USD
)
, 2003
-
2022
Originations have
shifted to borrowers
with strong credit
scores
- Prior to the Great Recession, only
20%
-
30% of mortgage originations
were to borrowers with credit
scores 760 or higher.
- During the post-pandemic refinance
boom, mortgage originations were
primarily being completed by
borrowers with excellent credit
—
73% of originations in Q1 2021 were
to 760
+
credit score borrowers.
- Median credit scores at origination
have remaining meaningfully above
historic norms in 2022.

Total U.S. Mortgage Debt Balance (in Trillions, USD
)
, 2003
-
2022
$4T
$6T
$8T
$10T
$12T
$14T
2
0
0
3
2
0
0
4
2
0
0
5
2
0
0
6
2
0
0
7
2
0
0
8
2
0
0
9
2
0
1
0
2
0
1
1
2
0
1
2
2
0
1
3
2
0
1
4
2
0
1
5
2
0
1
6
2
0
1
7
2
0
1
8
2
0
1
9
2
0
2
0
2
0
2
1
2
0
2
2
$11.67T in Q3 2022
$9.29T in Q3 2008
Total outstanding
mortgage debt has
surpassed Great
Recession levels
- While total debt has grown, its
growth rate over the last two years
is lower
(
9%
)
than annual debt
growth seen prior to the Great
Recession
(
12%
)
.
- Aggregate home value in the U.S.
has more than doubled since the
Great Recession, reaching more
than $43T in 2022.
12% CAGR
9% CAGR
—
2009
COVID
-
—
Today

Tappable Equity of U.S. Mortgage Holders (in Trillions USD
)
, 2004
-
2022
$2T
$4T
$6T
$8T
$10T
$12T
$14T
2
0
0
4
2
0
0
5
2
0
0
6
2
0
0
7
2
0
0
8
2
0
0
9
2
0
1
0
2
0
1
1
2
0
1
2
2
0
1
3
2
0
1
4
2
0
1
5
2
0
1
6
2
0
1
7
2
0
1
8
2
0
1
9
2
0
2
0
2
0
2
1
H
1
2
0
2
2
$2.2T in 2011
Aggregate home
equity in excess of
mortgage balances is
$11.5T in 2022
- “Tappable Equity” is the equity
available on all residential
properties with an existing
mortgage, before reaching a current
CLTV of 80%.
- Tappable equity reached an all-time
high of $11.5T trillion in 2022.
- The average owner with tappable
equity has $210,000 available to
borrow against.
$11.5T in 2022
Source: Black Knight
—
2009
COVID
-
—
Today

Number of U.S. Mortgage and Home Equity Accounts (in Millions), 2003
-
2022
20M
40M
60M
80M
100M
120M
Q
3
2
0
0
3
Q
3
2
0
0
4
Q
3
2
0
0
5
Q
3
2
0
0
6
Q
3
2
0
0
7
Q
3
2
0
0
8
Q
3
2
0
0
9
Q
3
2
0
1
0
Q
3
2
0
1
1
Q
3
2
0
1
2
Q
3
2
0
1
3
Q
3
2
0
1
4
Q
3
2
0
1
5
Q
3
2
0
1
6
Q
3
2
0
1
7
Q
3
2
0
1
8
Q
3
2
0
1
9
Q
3
2
0
2
0
Q
3
2
0
2
1
Q
3
2
0
2
2
Peak of 98.1M accts. in Q1 2008
Peak of 24.2M accts. in Q4 2007
Mortgage
Home Equity
82.1M accts. in Q2 2022
12.9M accts. in Q2 2022
The total number of
active mortgages is
nearly 16 million less
than its 2008 peak
- While total mortgage debt is at a
record high, the aggregate number
of mortgages is low relative to
historical standards.
- Despite the mortgage origination
boom in 2020 and 2021, the total
number of mortgage accounts has
remained flat and the number of
HELOC accounts has declined.
- About 40% of U.S. homeowners do
not have any outstanding mortgage
balance.
—
2009
COVID
-
—
Today

New Seriously Delinquent
(
90
+
Days) Balances by Loan Type
(
% of Balance), 2003
-
2022
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
Q
3
2
0
0
3
Q
3
2
0
0
4
Q
3
2
0
0
5
Q
3
2
0
0
6
Q
3
2
0
0
7
Q
3
2
0
0
8
Q
3
2
0
0
9
Q
3
2
0
1
0
Q
3
2
0
1
1
Q
3
2
0
1
2
Q
3
2
0
1
3
Q
3
2
0
1
4
Q
3
2
0
1
5
Q
3
2
0
1
6
Q
3
2
0
1
7
Q
3
2
0
1
8
Q
3
2
0
1
9
Q
3
2
0
2
0
Q
3
2
0
2
1
Q
3
2
0
2
2
Mortgage
Home Equity
Delinquency rates for
mortgages and home
equity loans are near
historic lows
- Following the Great Recession,
mortgage delinquency rates have
stayed low by historical standards.
- 90 days or more delinquency rate
for Q3 2022 was 0.5%
- Mortgage forbearance programs
have suppressed delinquencies by
allowing borrowers impacted by
COVID
-
19 to defer payment for a
period of time.
0.5% in Q3 2022
—
2009
COVID
-
—
Today

Quarterly Transition Rates for 30
-
60 Day Late Mortgage Accounts
15%
30%
45%
60%
75%
Q
3
2
0
0
3
Q
3
2
0
0
4
Q
3
2
0
0
5
Q
3
2
0
0
6
Q
3
2
0
0
7
Q
3
2
0
0
8
Q
3
2
0
0
9
Q
3
2
0
1
0
Q
3
2
0
1
1
Q
3
2
0
1
2
Q
3
2
0
1
3
Q
3
2
0
1
4
Q
3
2
0
1
5
Q
3
2
0
1
6
Q
3
2
0
1
7
Q
3
2
0
1
8
Q
3
2
0
1
9
Q
3
2
0
2
0
Q
3
2
0
2
1
Q
3
2
0
2
2
To Current
To 90
+
Days Late
Mortgages in various
stages of delinquency
are recovering at
historically high rates
- Only 11% of accounts in deliquency
of 30 or 60 days are transitioning to
90
+
day delinquency, as of Q3
2022.
- During the peak of the Great
Recession, about 44% of delinquent
accounts transitioned to 90
+
days
delinquent.
—
2009
COVID
-
—
Today
11% in Q3 2022
44% in Q3 2008

Number of New Foreclosures and Bankruptcies (in Thousands), 2003
-
2022
200
400
600
800
1000
Q
3
2
0
0
3
Q
3
2
0
0
4
Q
3
2
0
0
5
Q
3
2
0
0
6
Q
3
2
0
0
7
Q
3
2
0
0
8
Q
3
2
0
0
9
Q
3
2
0
1
0
Q
3
2
0
1
1
Q
3
2
0
1
2
Q
3
2
0
1
3
Q
3
2
0
1
4
Q
3
2
0
1
5
Q
3
2
0
1
6
Q
3
2
0
1
7
Q
3
2
0
1
8
Q
3
2
0
1
9
Q
3
2
0
2
0
Q
3
2
0
2
1
Q
3
2
0
2
2
New Foreclosure New Bankruptcy
The number of U.S.
foreclosures and
bankruptcies is down
meaningfully
- Approximately 28,000 individuals
had a new foreclosure notation
added to their credit reports in Q3
2022, remaining very low by
historical standards.
- This figure is up slightly from 2021,
due in part to the lifting of
foreclosure restrictions in most
jurisdictions.
—
2009
COVID
-
—
Today

III. Impact of Rising Interest Rates on PropTech Startups

Rate Increase by Loan Type
Aggressive rate hikes
have impacted pricing
of credit products,
particularly mortgages
- As U.S. inflation remains at multi-
decade highs, the Federal Reserve
has been aggressive with its
interest rate hikes — rates have
risen more than two percentage
points in just six months.
- Fed Chairman Jerome Powell has
specifically called out housing as a
key area of focus:
“Housing is significantly affected by
these higher rates, which are really
back where they were before the
global financial crisis. The housing
market was very overheated for a
couple of years after the pandemic,
as demand increased and rates were
low. The market needs to get back
into a balance between supply and
demand.”
- Additionally, since June the Fed has
been letting mortgage bonds roll off
its balance sheet as they mature
and slowed down MBS buying
activity.
Source: Visual Capitalist
Mortgages
+
330 bps since Feb ‘22
Credit
Cards
Auto
Loans
Personal
Loans
+
+
+

Public Real Estate Company Performance
(
Aggregated)
Rising interest rates
have impacted public
equity valuations,
particularly in tech
- Valuations are down across every
tech sector, and companies that
have not yet reached profitability
are particularly impacted.
- The Real Estate Tech Index includes
public proptech companies across
the following categories:
Source: Company Filings & CapIQ
Jan Feb Mar Apr May Jun Jul Aug Sep Oct
YTD Performance by Index
(
60%
)
(
50%
)
(
40%
)
(
30%
)
(
20%
)
(
10%
)
0%
10%
Real Estate Tech
S&P 500
NASDAQ
Bessemer Cloud
S&P
(
22%
)
NASDAQ
(
31%
)
R.E.
(
36%
)
Cloud
(
50%
)
Real Estate Tech Index
(
3%
)
(
1%
)
(
36%
)
S&P 500
(
4%
)
(
6%
)
(
22%
)
NASDAQ
+
7%
+
3%
(
31%
)
Bessemer Cloud Index
(
17%
)
(
12%
)
(
50%
)
30
-
Day
Price Δ
90
-
Day
Price Δ
YTD
Price Δ
1. Real Estate Marketing & Listings
2. Real Estate Brokerage & iBuying
3. Short Term Rentals & Leasing
4. Real Estate Services
5. Digital Mortgage
6. Vertical SaaS

eXp
(
EXPI
)
Redfin
(
RDFN
)
Anywhere
(
HOUS
)
Compass
(
COMP
)
)
Public Real Estate Brokerage Performance, 2022
Real estate technology
businesses are hit
particularly hard by
rising rates
- Mortgage rates have a direct impact
on housing affordability, which in
turn impact demand for housing.
- The steep rise in rates has impacted
transaction volume in real estate,
which is expected to decline 16%
year-over-year in 2022.
- Most real estate businesses derive
revenue based on transaction
volume (i.e. brokerage models).
- Additionally, valuation multiples
have declined in many R.E.
segments.
Source: Company Filings & CapIQ; as of October 2022
Y/Y Revenue Decrease, Q2’22
—>
Q3’22
eXp
(
EXPI
)
Redfin
(
RDFN
)
Anywhere
(
HOUS
)
Compass
(
COMP
)
)
YTD Stock Performance
EV / NTM Revenue Multiple Among Public Real Estate Brokerages, Oct ’21
—
Oct ‘22
2.0x
4.0x
6.0x 30D Δ ⬇ (3%)
YTD Δ ⬇ (51%)
ATH Δ ⬇ (91%)
5.5x
0.5x
Oct-20 Jan-21 Apr-21 Jul-21 Oct-21 Jan-22 Apr-22 Jul-22 Oct-22

New Delinquent Balances by Loan Type
(
30 Days or More DQ
)
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
11%
12%
13%
14%
15%
Q
3
2
0
0
3
Q
3
2
0
0
4
Q
3
2
0
0
5
Q
3
2
0
0
6
Q
3
2
0
0
7
Q
3
2
0
0
8
Q
3
2
0
0
9
Q
3
2
0
1
0
Q
3
2
0
1
1
Q
3
2
0
1
2
Q
3
2
0
1
3
Q
3
2
0
1
4
Q
3
2
0
1
5
Q
3
2
0
1
6
Q
3
2
0
1
7
Q
3
2
0
1
8
Q
3
2
0
1
9
Q
3
2
0
2
0
Q
3
2
0
2
1
Q
3
2
0
2
2
Mortgage
Home Equity
Delinquency rates
across loan categories
has remained low by
historical standards
- Delinquency rates have risen in the
last year, but still remain low relative
to prior recessionary periods.
- The auto loan delinquency rate is up
24% year-over-year
- The credit card delinquency rate is
up 22% year-over-year
- The mortgage delinquency rate is
up 51% year-over-year
—
2009
COVID
-
—
Today
Student
Credit Card
Auto

28
How Startups Are Adapting to This Environment
Public market valuations have declined across the
fintech and proptech verticals.
Impact Company Response
Private companies have adjusted burn in order to
extend runway and defer an external raise to 2024.
—
Time lag between changes in interest rates and
changes in asset prices, leading to frozen markets.
Cut burn, variablize headcount, diversify income
streams outside of transaction-based revenue
—
Costs of capital are rising and credit providers are
cycling out of real estate tech.
Startups are raising PropCo capital in order to build
a more permanent capital base.
—
Rising interest rates impact demand for credit
products; gain on sale margins have tightened.
Embrace agility in order to develop counter-cyclical
products (i.e. HELOC
)
—
Some early recession indictors, which may impact
delinquency rates across lending segments.
Tighten lending standards, lower loan amounts to
manage risk, diversify sources of capital.
—

Thomvest Housing Market Overview, December 2022

Recommended

Recommended

More Related Content

Similar to Thomvest Housing Market Overview, December 2022

Similar to Thomvest Housing Market Overview, December 2022 (20)

More from Thomvest Ventures

More from Thomvest Ventures (14)

Recently uploaded

Recently uploaded (20)

Thomvest Housing Market Overview, December 2022