Kansas City Area Local Market Report, First Quarter Median Price (Red Line) and One-year Price Growth 2015 Q1. Local Price Trends.

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1 Area Local Market Report, First Quarter 2015 Today's Market $180,000 $160,000 $140,000 $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $0 Median Price (Red Line) and One-year Price Growth % 10% 5% 0% -5% -10% -15% Local Price Trends Price Activity Current Median Home Price (2015 ) $153,000 1-year (4-quarter) Appreciation (2015 ) 8.7% 3-year (12-quarter) Appreciation (2015 ) 23.0% 3-year (12-quarter) Housing Equity Gain* $28,600 7-year (28 quarters) Housing Equity Gain* $13,500 9-year (36 quarters) Housing Equity Gain* $3,000 *Note: Equity gain reflects price appreciation only $203, % 28.8% $45,533 $5,333 -$13,067 Local Trend Prices continue to grow relative to last year Gains in the last 3 years have extended the trend of positive price growth after the recession Conforming Loan Limit** $417,000 $625,500 Most buyers in this market have access FHA Loan Limit $278,300 $625,500 to government-backed financing Local Median to Conforming Limit Ratio 37% not comparable Note: limits are current and include the changes made in November of 2012 and extended in November of 2013 Local NAR Leadership The market is part of region 9 in the NAR governance system, which includes all of Missouri, Kansas, Arkansas, and Oklahoma. The 2015 NAR Regional Vice President representing region 9 is Brian Jones.

2 Benefits of Ownership: Total Equity Appreciation $60,000 Total Equity Accrued to Owner by Year and Quarter of Purchase $50,000 $40,000 $37,957 $30,000 $20,000 $14,328 $10,000 $ Total Equity Gained** through 2015 from quarter in which home was of purchased Price Activity KansasCity 1-year (4-quarter) $14,328 $15,753 3-year (12-quarter)* $34,910 $53,565 5-year (20-quarter)* $32,088 $47,444 7-year (28 quarters)* $27,058 $17,200 9-year (36 quarters)* $21,997 $100 If purchase in 2005, the national price peak $27,660 $16,323 Local Trend Price appreciation and principle payments in the last 3 years have boosted total equity growth since the recession *Note: Equity gain reflects price and principle payments since purchase, prevailing 30-year fixed rate mortgage at time of purchase and a 10% downpayment. Downpayment is not included in total equity

3 Drivers of Local Supply and Demand Local Economic Outlook 12-month Job Change (Mar) 12-month Job Change (Feb) 36-month Job Change (Mar) Current Unemployment Rate (Mar) 26,800 32,900 47, % Not Comparable Not Comparable Not Comparable 5.5% Employment growth has eased, but remains positive Unemployment in is better than the national average and improving Year-ago Unemployment Rate 1-year (12 month) Job Growth Rate 6.3% 2.7% 6.6% 2.1% Local employment growth is strong compared to other markets Area Share of Total Employment by Industry Natural Resour 4.2% Natural 43.7 Natural 5.0% Natural Resources/ Resources/ #N/A #N/A Mining/Con #N/A #N/A Mining/Con #N/A #N/A struct struct Governmen Manufacturi #N/A #N/A Governmen 4.2% 5.0% Manufacturing Other t ng Other t 7.0% 71.9 Manufac8.7% Services 14.6% 7.0% Services 15.8% 4.0% Trade/Transpo 4.1% 19.9% Trade/T 18.8% Trade/Trans Leisure & Information 2.9% 29.7 portation/uti Hospitality Informa2.0% Leisure & lities 10.6% Financial Hospitality Act 7.4% % Financi 5.7% 9.8% Prof. & Busin 16.5% Profess13.9% Information Educ. & Heal 13.7% 141 Educat 15.6% 2.9% Educ. & Educational Leisure & Health Ho 9.8% Financial Leisure10.6% & Health Other Services 4.1% 41.8 Activities Other S4.0% Prof. & Services 7.4% Professiona 13.7% Government 14.6% Business 15.6% % Govern15.8% 100.0% l & Services Business #N/A #N/A 16.5% #N/A #N/A Services #N/A #N/A #N/A #N/A 13.9% 12-month Employment Change by Industry in the Area (Mar ) Goods Producing Natural Resources/Mining/Construction Natural Resources and Mining Construction Manufacturing NA 2,700 NA NA 1,200 Information Financial Activities Prof. & Business Services Educ. & Health Services Leisure & Hospitality Service Providing Excluding Government NA Other Services Manufacturi ng 8.7% ,400 7,200 3,500 2,500 0 Trade/Tran sportation/ Utilities 18.8% Information 2.0% Financial Activities 5.7% Trade/Transportation/Utilities 3,700 Government 2,900 State Economic Activity Index 12-month change ( Mar) 36-month change ( Mar) Missouri 2.9% 6.8% 3.4% 9.3% The economy of Missouri is growing more slowly than the rest of the nation, but improved modestly from last month's 2.92% change

4 Local Fundamentals 12-month Sum of 1-unit Building Permits through Mar 2015 New Housing Construction 4,217 not comparable The current level of construction is 23.4% above the long-term average 8-year average for 12-month Sum of 1-Unit Building Permits Single-Family Housing Permits (Mar 2015) 12-month sum vs. a year ago 3, % not comparable 3.1% Production above trend for an extended period of time could cause prices to moderate as inventory is built Construction is on the rise relative to last year, suggesting that the local inventory has stabilized 12,000 Construction: 12-month Sum of Local Housing Permits (Historical Average Shown in Red Dashed Line) 10,000 8,000 6,000 4,000 2,000 0 While new construction is the traditional driver of supply in real estate, foreclosures and short-sales now have a strong impact on inventories, particularly at the local level. Rising inventories, through construction or distressed sales, place downward pressure on the median home prices. 6.0% State Total Foreclosure Rate vs. U.S Average ( Average in Blue Dashed Line) 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Source: Mortgage Bankers' Association

5 Affordability Long-Term Trend: Ratio of Local Mortgage Servicing Cost to Income (Local Historical Average Shown in Red, Average in Green) 30% 25% 20% 15% 10% 5% 0% Monthly Mortgage Payment to Income Ratio for 2014 Ratio for % 6.9% 15.8% 14.3% Historically strong and an improvement over the fourth quarter of 2014 Historical Average 10.4% 20.0% More affordable than most markets 12% Recent Trend - Local Mortgage Servicing Cost to Income (Historical Average Shown in Red Dashed Line) 10% 8% 6% 4% 2% 0% 2013 Q Q Q Q Median Home Price to Income Ratio for Ratio for Historical Average The price-to-income ratio has fallen and is below the historical average Affordable compared to most markets

6 Ratio of Local Median Home Price to Local Average Income (Local Historical Average Shown in Red, Average in Green) The Mortgage Market year Fixed Mortgage Rate and Treasury Bond Yield % 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Spread (left axis) 30-Year FRM (Right axis) 10-Year Treasury Bond (Right Axis) The headline measure of economic activity, GDP growth, swung from a soft 2.2% in the 4th quarter of 2014 to a dismal 0.2% in the 1st quarter of 2015 with some suggesting that the 1st quarter figure would be revised lower. Sharp declines in global fuel prices over the winter impacted the domestic oil industry, while a rapid rise in the value of the dollar impacted domestic manufacturers ability to export and increased competition from importers. As a result, employment in both industries slumped in the first quarter. Compounding these issues was weakness in single family housing starts and construction. Weather was partially to blame, but builder sentiment was weak reflecting a pullback in consumer confidence. While not a recession, this economic soft patch weighed on mortgage rates in the 1st quarter which saw the average 30-year fixed rate fall from 3.97% in the 4th quarter to 3.73% in the 1st quarter of Treasury rates fell by more and a result the spread between the two rose from 169 basis points to 176. Affordability surged on sub-4% mortgage rates that were augmented by a sharp 50 basis point cut to the FHA s annual mortgage insurance premium. NAR Research forecasts the average rate for a 30-year fixed rate mortgage to climb to 4.3% by year end 2014 and to average 5.2% in 2016 as the Federal Reserve begins to raise short term rates in response to improving domestic and international economic conditions gain steam.

7 6.0% REALTOR Price Expectations for the Next 12 Months ( Average in Blue Dashed Line) 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Source: NAR REALTOR Price Expectations Missouri Mar 2.8% 3.5% Prior 12 months 2.9% 3.5% REALTORS expect weaker price growth in Missouri than in the in the next 12 months. Their price expectations for the local market are more modest than a year ago.

8 Geographic Coverage for this Report The area referred to in this report covers the geographic area of the metro area as officially defined by the Office of Management and Budget of the Government. The official coverage area includes the following counties: Bates County, Caldwell County, Cass County, Clay County, Clinton County, Franklin County, Jackson County, Johnson County, Lafayette County, Leavenworth County, Linn County, Miami County, Platte County, Ray County, and Wyandotte County More information on the OMB's geographic definitions can be found at