Black Knight releases latest Mortgage Monitor Report
Slowing home price appreciation and declining interest rates have helped improve housing affordability and the buying power of homebuyers.
Black Knight’s Mortgage Monitor Report says that annual home price appreciation has slowed for 10 consecutive months as of December 2018; falling from a high of 6.8% annual growth in February to 4.6% at the end of the year.
Month-over-month, the average home price declined 0.3% in December, bringing the average home price down a combined -0.82% (-$2,440) over the past four months.
With the 30-year mortgage rate declining by more than half a point, that equated to a 6% increase in consumers’ homebuying power, keeping monthly payments the same; or a $62 decrease in monthly mortgage payment on the average priced house with a 20% down payment.
“Combined with the average 30-year fixed rate declining by more than half a point over the last three months, housing is now the most affordable it’s been since early in the 2018 home buying season,” said Ben Graboske, president of Black Knight’s Data & Analytics division. “It currently requires 22.2% of median income to purchase the average home with a 20% down payment on a 30-year fixed-rate loan. That’s down from a post-recession high of 23.4% just a few months ago, and well below the long-term average of 25% seen in the late 1990s through the early 2000s, before the housing bubble.”
Markets where appreciation is below average
While annual home price appreciation (HPA) continues to outpace the 25-year average of 3.9% nationally, the slowdown in some markets is below this.
Deceleration in HPA is seen most acutely on the West Coast, particularly Washington State, and even more so in California, which has seen its annual rate of appreciation fall from over 10% in February 2018 to just 3% as of the end of 2018.
After seeing annual HPA rates above 20% in 2017, prices in San Jose are now nearly flat from where they were one year ago. Home prices have also fallen from recent double-digit growth to just 1.9% in San Francisco and 3.1% in Seattle.
