Fitch Releases Report on Sustainable Home Price Model

NEW YORK--()--Fitch Ratings released today an update to a special report describing its Sustainable Home Price model. The model, originally released in 2011, associates movements in home prices with changes in underlying economic fundamentals such as income and unemployment, and is a key analytical component of the U.S. RMBS Loan Loss Model.

The model focuses on long-term dynamics and does not consider momentum or inflation rates, and so is not considered a home price projection, but is a point-in-time measurement of market equilibrium. Overall, the model currently evaluates prices nationally to be sustainable, though price growth over the last several years has pushed some regions into overvaluation.

In particular, home prices in areas of coastal California and Texas have experienced growth rates that exceed the growth rates of their underlying economic fundamentals. San Francisco, Los Angeles, Riverside, and Houston all are identified as more than 10% overvalued. Price momentum continues to be strong in these regions, but Fitch expects that price growth will need to moderate or correct as the economies continue to grow for home prices to regain long-term equilibrium.

Fitch's 'U.S. RMBS Sustainable Home Price Model" is available at 'www.fitchratings.com' or by clicking on the above link.

Additional information is available on www.fitchratings.com.

U.S. RMBS Sustainable Home Price Model

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=874982

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

Contacts

Fitch Ratings
Grant Bailey, +1-212-908-0544
Managing Director
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Media Relations
Sandro Scenga, New York, +1-212-908-0278
sandro.scenga@fitchratings.com

Contacts

Fitch Ratings
Grant Bailey, +1-212-908-0544
Managing Director
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Media Relations
Sandro Scenga, New York, +1-212-908-0278
sandro.scenga@fitchratings.com