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Home-Price Appreciation Records Highest Growth in Six Years

December was the fourth consecutive month of home-price appreciation and the largest single-month growth in more than 6.5 years, as reported in Black Knight’s Mortgage Monitor Report.

Home-price growth fell from nearly 7% in early 2018 to 3.8% in August 2019, but it gained almost a full percentage point over the last four months of 2019—reaching 4.7% to close the year. 

The bottom 20% of all homes saw prices rise by 6.6% in December 2019, which is slightly higher than August 2019’s 6.5%. Home prices in Tier 2 rose 5.7%, Tier 3 homes saw prices increase 4.8%, and prices in Tier 4 jumped 3.8%. The top 20% of all homes saw prices increase by 2.3%. 

Prices in the top 20% of all homes rose just 0.7% in August 2019.

Salt Lake City had the nation’s highest home-price growth at 8.1% and Phoenix followed at 7.8%. 

Other markets that had the highest home-price appreciation were: Buffalo, New York (7.6%); Columbus, Ohio (7.4%); Charlotte, North Carolina (7.1%); and Providence, Rhode Island (6.9%). 

Miami had the lowest price appreciation at just 3.4%. Dallas was second at 3.1%, Detroit record price growth of 3%, home prices in Hartford, Connecticut, rose 3%, and Baltimore had home-price growth of 2.6%.

“Still, even with home price growth accelerating, today’s low-interest-rate environment has made home affordability the best it’s been since early 2018. At that time, the housing market was red-hot, with national home price growth at 6.6% and climbing—before rising rates and tightening affordability triggered a pullback in growth rates,” said Black Knight Data & Analytics President Ben Graboske. “That’s not the case today. Despite the average home price increasing by nearly $13,000 from just over a year ago, the monthly mortgage payment required to buy that same home has actually dropped by 10% over that same span due to falling interest rates.”

Black Knight also found that it now requires 20.6% of median-monthly income to purchase the same home as it did last year—the smallest payment-to-income ratio in two years. 

Prospective homebuyers can purchase a home that is $48,000 more expensive than a year ago but still but the same in principal and interest, which represents a 16% in buying power. 

About Author: Mike Albanese

A graduate of the University of Alabama, Mike Albanese has worked for news publications since 2011 in Texas and Colorado. He has built a portfolio of more than 1,000 articles, covering city government, police and crime, business, sports, and is experienced in crafting engaging features and enterprise pieces. He spent time as the sports editor for the "Pilot Point Post-Signal," and has covered the DFW Metroplex for several years. He has also assisted with sports coverage and editing duties with the "Dallas Morning News" and "Denton Record-Chronicle" over the past several years.

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