First American Corporation (new) · NYSE:FAF

First American Corporation (new) — First American Financial — Reg A Offering (January 2025)

59 slides from First American Corporation (new)'s offering presentation, Jan 29, 2025

  1. Slide 1: 2025 Housing Market Outlook: Will the Freeze Finally Thaw?

    WELCOME TO THE 2025 Housing Market Outlook: Will the Freeze Finally Thaw? January 30 1:00pm - 2:00pm Eastern Presented by: Odeta Kushi Deputy Chief Economist First American First American Financial Corporation makes no express or implied warranty respecting the information presented and assumes no r

  2. Slide 2: First American Data & Analytics: #1 in the industry

    First American Document Images Parcel Boundaries Data & Analytics 8.33+ Billion 99% of population 85% of population # 1 in the industry Deeds, Mortgages, & Foreclosures Assessor Maps Assessor/Property Ownership in every metric 99% of population 72% of population 100% of population that matters Assig

  3. Slide 3: About Our Presenter

    About Our Presenter As Deputy Chief Economist, Odeta Kushi leads the development of analysis, commentary, and forecasts on trends in the real estate and mortgage markets. Odeta’s research focuses on economic trends impacting real estate, including demographic shifts, affordability, and housing suppl

  4. Slide 4: Webinar Housekeeping

    Webinar Housekeeping Webinar length: Q&A session Microphones & Use the chat box Recording and after the Webcams are to submit slides will be 1 hour. questions during available after presentation. turned off. the webinar. event.

  5. Slide 5: What's the Fed to Do?

    What’s the Fed to Do? © 2025 First American Financial Corporation and/or its affiliates. All rights reserved.  NYSE: FAF

  6. Slide 6: Inflation Makes Progress Towards the Fed's 2 Percent Target

    Inflation Makes Progress Towards the Fed's 2 Percent Target Annual Change in Personal Consumption Expenditures (PCE), Core PCE, Consumer Price Index (CPI), and Core CPI 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% Jan-20 Jul-20 Jan-21 Jul-21 Jan-22 Jul-22 Jan-23 Jul-23 Jan-24 Jul-24 PCE Core PCE CPI Core CPI Targe

  7. Slide 7: Reasons for the "Final Mile" Holdup?

    Reasons for the “Final Mile” Holdup? Supercore Services (Core Services ex-Shelter), Core Goods, Shelter Inflation (% Change Year-over-Year), Averages (Horizontal Lines) 14 12 10 8 6 4 2 0 -2 -4 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Goods

  8. Slide 8: Is Wage Growth Set to Slow?

    Is Wage Growth Set to Slow? Quits Rate (Private Sector, Advanced Two Quarters, % SA) and ECI Private Wages and Salaries (YoY Growth, % SA) 3.4 8.5 3.2 7.5 3.0 6.5 2.8 5.5 2.6 2.4 4.5 2.2 3.5 2.0 2.5 1.8 1.5 1.6 1.4 0.5 Quits Rate (LHS) ECI Private Wages and Salaries (RHS) ECI: Services (RHS) Source:

  9. Slide 9: Rent Deceleration

    Rent Deceleration Yearly Growth in New Tenant and All Tenant Index 14% 12% 10% 8% 6% 4% 2% 0% -2% -4% New Tenant Rent Index All Tenant Rent Index Source: Bureau of Labor Statistics, Q4 2024 @odetakushi © 2025 First American Financial Corporation and/or its affiliates. All rights reserved.  NYSE: FA

  10. Slide 10: @odetakushi

    @odetakushi © 2025 First American Financial Corporation and/or its affiliates. All rights reserved.  NYSE: FAF

  11. Slide 11: Two Measures of Full Employment

    Two Measures of Full Employment Unemployment Rate and Prime-Age Labor Force Participation Rate (%, SA) 16 85 14 84 12 83 10 8 82 6 81 4 80 2 0 79 Recession Unemployment Rate (LHS) Prime-Age Labor Force Participation Rate (RHS) Source: U.S. Bureau of Labor Statistics, Dec. 2024 @odetakushi © 2025 Fir

  12. Slide 12: Most of the Market Rise in Unemployment Driven by Job Losers

    Most The of the Market Labor Rise in Unemployment is DrivenCool Continues to Gradually by Job Losers Failing to Find New Work Change in Unemployment Job Hires, Since Quits, Layoffs and January 2023, Discharges, Thousands Openings (Levels in Thousands, Seasonally Adjusted) 1,600 16,000 1,400 14,000 1

  13. Slide 13: The Great Resignation Turns Into The Great Stay

    The Great Resignation Turns Into The Great Stay Job Openings, Hires, Quits and Layoffs: Total Nonfarm, Rate, Seasonally Adjusted 9 8 7 6 5 4 3 2 1 0 Recessions Openings Hires Quits Layoffs Source: U.S. Bureau of Labor Statistics, Job Openings and Labor Turnover Survey, Nov. 2024 @odetakushi © 2025 F

  14. Slide 14: Aggregate Excess Savings Have Been Depleted

    Aggregate Excess Savings Have Been Depleted Aggregate Personal Savings Versus Pre-Pandemic Trend ($, Billions) 600 500 400 300 200 100 0 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 Jul-19 Jan-20 Jul-20 Jan-21 Jul-21 Jan-22 Jul-22 Jan-23 Jul-23 Jan-24 Jul-24 Accumulation of Excess Savings Drawdo

  15. Slide 15: Credit Card Debt is Rising, as Are Delinquency Rates

    Credit Card Debt is Rising, as Are Delinquency Rates Credit Card Debt (USD in Billions, Left Axis), Credit Card Delinquency Rate (Right Axis, in Percent) $1,400 12 $1,200 $1,000 10 $800 $600 8 $400 $200 – 6 Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Dec-23 Credit Card Debt (Nominal) Cre

  16. Slide 16: The FOMC Cuts Rate and Signals More to Come

    The FOMC Cuts Rate and Signals More to Come Economic projections of Federal Reserve Board members and Federal Reserve Bank presidents @odetakushi © 2025 First American Financial Corporation and/or its affiliates. All rights reserved.  NYSE: FAF

  17. Slide 17: Market Expectations of Fed Rate Cuts

    Market Expectations of Fed Rate Cuts Share of Market Expectations (Y-Axis) of Number of Fed Fund Rate Cuts by Year End 2025 (X-axis) Current target rate: 425-450% 33.40% 29.20% 19.60% 9.90% 6.50% 1.20% 0.10% 275-300 300-325 325-350 350-375 375-400 (Current 400-425 425-450 Fed Expectations) Source: C

  18. Slide 18: Mind the Gap Between Mortgage Rates and the 10-Year Treasury Yield

    Mind the Gap Between Mortgage Rates and the 10-Year Treasury Yield 30-Year FRM, Federal Funds Effective Rate, Market Yield on 10-Year Treasury Securities (%) 20 18 16 14 12 10 8 6 4 2 0 30-YR FRM Federal Funds Rate 10-Year Treasury Yield Source: Freddie Mac, Board of Governors of the Federal Reserve

  19. Slide 19: POLL: Average 30-year fixed mortgage rate by end of 2025

    POLL: What will be the average 30-year fixed mortgage rate by the end of 2025? ❑ < 6% ❑ 6.0-6.5% ❑ 6.5-7% ❑ 7.0-7.5% ❑ >7.5% © 2025 First American Financial Corporation and/or its affiliates. All rights reserved.  NYSE: FAF

  20. Slide 20: Mortgage Rate Forecasts by Fannie Mae, MBA, Wells Fargo

    Fannie Wells Date Mae MBA Fargo Average Q1 2025 6.7% 7.0% 7.10% 6.9% Q2 2025 6.6% 6.9% 6.9% 6.8% Q3 2025 6.5% 6.7% 6.65% 6.6% Q4 2025 6.5% 6.5% 6.5% 6.5% Source: Fannie Mae, MBA, Wells Fargo, 2025 @odetakushi © 2025 First American Financial Corporation and/or its affiliates. All rights reserved.  N

  21. Slide 21: Takeaways: Inflation, Fed and mortgage rates

    Takeaways: 1. Inflation has proven to be stickier than expected, but fundamentals have been and will remain disinflationary in early 2025 2. Stubborn inflation, robust economic growth, and a resilient labor market have reduced expectations for Fed rate cuts this year 3. The baseline expectation is t

  22. Slide 22: The Long-Run Demographic Tailwind

    The Long-Run Demographic Tailwind © 2025 First American Financial Corporation and/or its affiliates. All rights reserved.  NYSE: FAF

  23. Slide 23: @odetakushi

    @odetakushi © 2025 First American Financial Corporation and/or its affiliates. All rights reserved.  NYSE: FAF

  24. Slide 24: Millennials Catching Up, Boomers Winding Down

    Millennials Catching Up, Boomers Winding Down Homeownership Rates by Age and Generational Cohort 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 20 25 30 35 40 45 50 55 60 65 70 75 Silent Boomer Gen X Millennial Gen Z Source: First American Calculations; IPUMS CPS ASEC, 2023 @odetakushi © 2025 First American

  25. Slide 25: @odetakushi

    @odetakushi © 2025 First American Financial Corporation and/or its affiliates. All rights reserved.  NYSE: FAF

  26. Slide 26: Sunbelt Markets Experience Strongest Population Growth

    -1.0% -0.5% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% Jacksonville, FL Austin, TX @odetakushi Orlando, FL Raleigh, NC Dallas, TX Houston, TX Charlotte, NC San Antonio, TX Tampa, FL Nashville, TN Oklahoma City, OK 2022-2023 Annual Population Growth, % Atlanta, GA © 2025 First American Financial Corporation and/o

  27. Slide 27: @odetakushi

    @odetakushi © 2025 First American Financial Corporation and/or its affiliates. All rights reserved.  NYSE: FAF

  28. Slide 28: @odetakushi

    @odetakushi © 2025 First American Financial Corporation and/or its affiliates. All rights reserved.  NYSE: FAF

  29. Slide 29: Takeaways: Demographics for home buying

    Takeaways: 1. The demographics for home buying will remain very favorable in the coming years 2. Over the next decade, as baby boomers age out of homeownership, the housing shortage may narrow and eventually disappear 3. Many of the homes being sold by baby boomers will need some work 4. Given the h

  30. Slide 30: You Can't Buy What's Not For Sale

    You Can’t Buy What’s Not For Sale © 2025 First American Financial Corporation and/or its affiliates. All rights reserved.  NYSE: FAF

  31. Slide 31: Building the Housing Debt

    Building the Housing Debt Difference Between New Housing Units Completed (SAAR) and New Household Formation (2-Year Moving Average) 2,000k 1,500k 1,000k 500k 0k (500k) (1,000k) (1,500k) Source: Census Bureau, HUD (obsolescence rate of 0.31% of existing stock), Dec. 2024 *Household formation are impu

  32. Slide 32: The Big Building Short

    The Big Building Short Housing Starts Per 1,000 Households 50 45 40 35 30 25 20 15 10 5 0 1920 1925 1930 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 Recessions Housing Starts Per 1,000 Households Pre-Pandemic Historical Average Source: U.S. Bureau of the

  33. Slide 33: Size of the Housing Shortage

    Something Economists Agree On? The Size of the Housing Shortage Current Housing Deficit Estimates by Firm, Under Construction Housing (Apartments plus Homes), Millions of Housing Units 6 5 4 3 2 1 0 Under Average JCHS, Harvard John Burns Moody's Realtor.com Freddie Mac Fannie Mae NAR Construction Sh

  34. Slide 34: Rates on Existing Mortgages vs. New Mortgages

    Rates on Existing Mortgages (Homeowners) vs. New Mortgages (Homebuyers) Prevailing 30-YR FRM (Left-Axis), Average Interest Rate on Outstanding Debt(Left-Axis), Difference Between Prevailing and Outstanding (Right-Axis), % 8 4 7 3 6 6.51% 2 5 1 4.2% 4 0 3 -1 2 -2 Prevailing-Outstanding Prevailing 30

  35. Slide 35: 83 Percent of Mortgaged Homes Have a Rate Below 6 Percent

    83 Percent of Mortgaged Homes Have a Rate Below 6 Percent Percent Share of Outstanding Residential Mortgages by Interest Rate at Origination 100 90 >=6% 80 70 5-6% 60 4-5% 50 40 3-4% 30 <3% 20 10 0 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20 Jan-21 Jan-22 Jan-23 Jan-24 Source: NMDB, Firs

  36. Slide 36: What's For Sale? A Historically Low Inventory

    What’s For Sale? A Historically Low 135 in Every 10,000 Homes New and Existing Inventory for Sale (Thousands, SA, % of Households) 4.0% 4,400 3,900 3.5% 3,400 3.0% 2,900 2,400 2.5% 1,900 2.0% 1,400 1.5% 900 400 1.0% Jan-99 Jan-12 Jan-91 Jan-92 Jan-93 Jan-94 Jan-95 Jan-96 Jan-97 Jan-98 Jan-00 Jan-01

  37. Slide 37: @odetakushi

    @odetakushi © 2025 First American Financial Corporation and/or its affiliates. All rights reserved.  NYSE: FAF

  38. Slide 38: Purchase Applications Remain Near Lowest Levels Since Mid-1990s

    Purchase Applications Remain Near Lowest Levels Since Mid-1990s MBA: Volume Index: Mortgage Loan Applications for Purchase (SA, Mar-16-90=100 600 12 500 10 400 8 300 6 200 4 100 2 0 0 Jan-90 Mar-92 May-94 Jul-96 Sep-98 Nov-00 Jan-03 Mar-05 May-07 Jul-09 Sep-11 Nov-13 Jan-16 Mar-18 May-20 Jul-22 Sep-

  39. Slide 39: 40% of Owner-Occupied Housing is Free-and-Clear

    40% of Owner-Occupied Housing is Free-and-Clear Share of Owner-Occupied Housing Without a Mortgage 39.8% 39.3% 38.7% 38.1% 38.3% 37.9% 37.0% 37.0% 37.2% 36.2% 35.1% 33.6% 33.6% 32.8% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020* 2021 2022 2023 Source: American Community Survey 1-Year Estim

  40. Slide 40: Homeowners Have an Average of $348k in Equity

    Homeowners Have an Average of $348k in Equity 2021 Inflation-Adjusted Homeowner Equity per Owned Household 375,000 325,000 275,000 225,000 175,000 125,000 75,000 Source: First American Calculations, Board of Governors of the Federal Reserve System, Q3 2024 @odetakushi © 2025 First American Financial

  41. Slide 41: Refinance Demand Up 17 Percent Compared to One Year Ago

    Refinance Demand Up 17 Percent Compared to One Year Ago MBA: Volume Index: Mortgage Loan Applications for Refinance (SA, Mar-16-90=100) 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Jan-19 Jul-19 Jan-20 Jul-20 Jan-21 Jul-21 Jan-22 Jul-22 Jan-23 Jul-23 Jan-24 Jul-24 Jan-25 Refinance Applications Pre-Pa

  42. Slide 42: Takeaways: Housing shortage and rate lock-in

    Takeaways: 1. More than a decade of underbuilding has contributed to a chronic housing shortage 2. The persistent rate lock-in effect has only exacerbated the housing shortage 3. Housing supply has increased in 34 of the top 50 markets we track on a year-over-year basis 4. Where housing inventory gr

  43. Slide 43: If You Can't Find an Existing Home, Buy a New One

    If You Can’t Find an Existing Home, Buy a New One © 2025 First American Financial Corporation and/or its affiliates. All rights reserved.  NYSE: FAF

  44. Slide 44: Builder Sentiment Inches Higher in January

    Builder Sentiment Inches Higher in January NAHB/Wells Fargo SF HMI Index and SF Sales for the Next 6 Months (Data Through 1/2025), Privately Owned Housing Starts: 1-Unit Structures, Thousands of Units, Monthly (SAAR, Through 12/2024) 2,000 100 1,800 90 1,600 80 1,400 70 1,200 60 1,000 50 800 40 600

  45. Slide 45: New Homes Make Up A Historically High Share of Inventory

    New Homes Make Up A Historically High Share of Overall Inventory Existing and New Home Inventory as a Share of Total Inventory, % 100% 35% 95% 30% 90% 25% 85% 20% 80% 15% 75% 10% 70% 5% 65% 0% Jan-90 Jan-92 Jan-94 Jan-96 Jan-98 Jan-00 Jan-02 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 Jan-14 Jan-16 Jan-18 Ja

  46. Slide 46: New Home Sales Make Up 14% of Total Sales

    New Home Sales Make Up 14% of Total Sales Existing and New Home Sales as a Share of Total Sales, % 100% 20% 18% 95% 16% 14% 90% 12% 85% 10% 8% 80% 6% 4% 75% 2% 70% 0% Jan-91 Jan-93 Jan-95 Jan-97 Jan-99 Jan-01 Jan-03 Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15 Jan-17 Jan-19 Jan-21 Jan-23 Existing Home

  47. Slide 47: New Home Prices Down 7 Percent From 2022 Peak

    New Home Prices Down 7 Percent From 2022 Peak Median Sales Price for New Houses Sold (NSA) $140,000 $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $0 Jan-00 Jan-02 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 Jan-14 Jan-16 Jan-18 Jan-20 Jan-22 Jan-24 Recessions Median Sale Price Source: U.S. Census Bureau,

  48. Slide 48: Share of New Homes Sold Below $300k Rises

    Share of New Homes Sold Below $300k Rises Share of New Houses Sold by Sales Price, % 35 30 25 20 15 10 5 0 Under $300,000 $300,000 to $399,999 $400,000 to $499,999 $500,000 to $599,999 $600,000 to $799,999 $800,000 to $999,999 $1,000,000 and over Dec 2023 Dec 2024 Source: U.S. Census Bureau, First A

  49. Slide 49: Size of a New Home is the Smallest Since 2010

    Size of a New Home is the Smallest Since 2010 New Privately Owned Housing Starts in the United States, Median Square Feet of Floor Area for One-Family Units 2,600 2,500 2,400 2,300 2,200 2,100 2,000 Source: U.S. Census Bureau, U.S. Department of Housing and Urban Development, Q3 2024 @odetakushi © 2

  50. Slide 50: Takeaways: New home market

    Takeaways: 1. Builders continue to face supply-side headwinds and higher financing costs that make it challenging to build new homes 2. Nevertheless, the new home market is expected to outperform the existing-home market due to builders’ ability to offer incentives such as mortgage rate buydowns and

  51. Slide 51: Even if it is For Sale, Can You Afford it?

    Even if it is For Sale, Can You Afford it? © 2025 First American Financial Corporation and/or its affiliates. All rights reserved.  NYSE: FAF

  52. Slide 52: @odetakushi

    @odetakushi © 2025 First American Financial Corporation and/or its affiliates. All rights reserved.  NYSE: FAF

  53. Slide 53: @odetakushi

    @odetakushi © 2025 First American Financial Corporation and/or its affiliates. All rights reserved.  NYSE: FAF

  54. Slide 54: POLL: 2025 national house price growth

    POLL: In 2025, average national house price growth will be: ❑ Positive on an annual basis ❑ Negative on an annual basis ❑ Flat on an annual basis © 2025 First American Financial Corporation and/or its affiliates. All rights reserved.  NYSE: FAF

  55. Slide 55: Affordability May Improve in 2025

    Affordability May Improve in 2025 Nominal HPI and Real House Price Index* (% Change Year-over-Year), Forecasted (Jan. 2025- Dec. 2025) 70% By December 2025, Year-Over-Year: Nominal HPI: +3.4% 60% Income: +3.5% Mortgage Rates: 6.5% 50% House-buying Power: +6% 40% Affordability is up 2% 30% 20% 10% 0%

  56. Slide 56: @odetakushi

    @odetakushi © 2025 First American Financial Corporation and/or its affiliates. All rights reserved.  NYSE: FAF

  57. Slide 57: Takeaways: Affordability

    Takeaways: 1. If rates gradually decline, income growth remains positive, and house price growth stabilizes, affordability could improve modestly this year 2. Affordability trends will vary by market: the faster the inventory growth, the more affordable the market becomes 3. We find the strongest su

  58. Slide 58: Five Predictions for 2025

    Five Predictions for 2025 1. Mortgage rates will remain above 6 percent, but affordability may improve modestly by the end of the year 2. House prices to moderate, but remain positive nationally 3. Inventory will improve but remain historically low 4. Existing-home sales will improve but stay below

  59. Slide 59: First American's Economic Resources

    First American’s Economic Resources FirstAm.com/Economics @odetakushi #FirstAmEcon Econ Center #REconomy Podcast #REconomy Podcast © 2025 First American Financial Corporation and/or its affiliates. All rights reserved.  NYSE: FAF

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