JACKSONVILLE, Fla.,
June 3, 2019 /PRNewswire/ -- Today,
the Data & Analytics division of Black Knight, Inc. (NYSE: BKI)
released its latest Mortgage Monitor Report, based upon the
company's industry-leading mortgage performance, housing and public
records datasets. This month, leveraging its McDash loan-level
mortgage performance data in combination with the Black Knight Home
Price Index (HPI), the company revisited the home price and
affordability landscape. As Black Knight's Data & Analytics
Division President Ben Graboske
explained, home prices continued their trend of deceleration in
March, but lower interest rates over the past three months have
brought affordability to its best point in more than a year.
"In what is usually the calendar-year high point for home price
gains, month-over-month appreciation in March 2019 was just 1%, down from 1.25% at the
same time last year," said Graboske. "Likewise, the annual rate of
appreciation has now slipped to 3.8%, the first time annual home
price growth has fallen below its 25-year average of 3.9% since
2012. That makes 13 consecutive months of home price deceleration.
As we've been reporting, home prices began to decelerate in
February 2018 as rising interest
rates started putting pressure on affordability. The situation
intensified in the last half of the year as 30-year fixed rates
peaked near 5% in November, bringing affordability levels close to
their long-term averages. Of course, rates have since declined, and
are now hovering close to 4%. However, they didn't fall below 4.25%
until the last week of March, meaning we likely won't see the
impact – if any – on home prices until May or June housing
numbers.
"Regardless, falling rates have already had a positive impact on
affordability. In fact, the monthly payment needed to purchase the
average-priced home with a 20% down payment has declined by 6% in
the last six months. It currently requires $1,173 per month to make that purchase, the
lowest such payment in more than a year. When we factor income into
the equation, we see that it takes 22% of the median income to
purchase the average-priced home. That's the lowest
payment-to-income ratio in more than a year as well, and far below
the long-term average of 25.1%. That the market reacted in terms of
slowing home price growth even before we hit that long-term average
suggests that a 25% payment-to-income ratio may not be sustainable
in today's market, whether due to excess non-mortgage related debt,
lending standards or other factors."
Of the 100 largest U.S. housing markets, 85 have seen their
growth rate decrease over the past 12 months. Slowing continues to
be strongest in the western U.S., with the most acute deceleration
along the western coast of California and in Seattle, Wash. California's rate of appreciation has slowed
by 8% (an 84% reduction) from 9.6% one year ago to just 1.6% as of
March. San Jose, Seattle and San
Francisco have all seen annual home price growth rates
declining by more than 10 percentage points (-30%, -13%, and -12%)
respectively. The median home price in San Jose is now down 6% from last year
following three consecutive months of negative year-over-year
movement; this comes after having seen double-digit growth for much
of the last few years.
Even with rates pulling back to near 4%, and affordability
improving, four states – California, Hawaii, Maine
and Nevada plus the District of Columbia – remain less affordable
than their own long-term averages. The disparity is most noticeable
in California, where – despite
interest rate declines and, in some cases, rapidly slowing home
price growth – it requires 4% more of the median household income
to buy the average-priced home, and is far less affordable than
long-term benchmarks. This suggests that, while falling rates may
have the ability to reheat some housing markets across the country,
it may not be enough to alleviate the affordability constraints
that have been putting downward pressure on California housing markets.
About the Mortgage Monitor
The Data & Analytics division of Black Knight manages the
nation's leading repository of loan-level residential mortgage data
and performance information covering the majority of the overall
market, including tens of millions of loans across the spectrum of
credit products and more than 160 million historical records. The
Black Knight HPI is one of the most complete, accurate and timely
measures of home prices available, providing essential micro-level
valuation data by covering nearly 90 percent of U.S. residential
properties at the ZIP-code level. In addition, the company
maintains one of the most robust public property records databases
available, covering 99.9% of the U.S. population and households
from more than 3,100 counties.
Black Knight's research experts carefully analyze this data to
produce a summary supplemented by dozens of charts and graphs that
reflect trend and point-in-time observations for the monthly
Mortgage Monitor Report. To review the full report, visit:
https://www.blackknightinc.com/data-reports/
About Black Knight
Black Knight (NYSE: BKI) is a
leading provider of integrated software, data and analytics
solutions that facilitate and automate many of the business
processes across the homeownership lifecycle.
As a leading fintech, Black Knight is committed to being a
premier business partner that clients rely on to achieve their
strategic goals, realize greater success and better serve their
customers by delivering best-in-class software, services and
insights with a relentless commitment to excellence, innovation,
integrity and leadership. For more information on Black Knight,
please visit http://www.blackknightinc.com/.
For more information:
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Michelle Kersch
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Mitch
Cohen
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904.854.5043
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704.890.8158
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michelle.kersch@bkfs.com
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mitch.cohen@bkfs.com
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SOURCE Black Knight, Inc.