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.