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Black Knight Inc., has released the latest iteration of its Originations Monitor Report for June 2022 which found that 30-year mortgage rates peaked above 6% mid-June before falling to 5.79% by the end of the month.
By leveraging data from Black Knight’s Optimal Blue PPE platform, the report also found that home price growth had slowed in 97 of the top 100 markets with numbers decreasing from 20.4% to 19.3%, the largest single-month deceleration since 2006. However, prices were still up 1.5% month-over-month, twice the historical averages typically seen in May.
“The annual home price growth rate fell by more than a full percentage point in May, the largest monthly decline at the national level since 2006,” said Ben Graboske, Black Knight’s Data & Analytics President. “However, even with growth slowing in 97 of the top 100 U.S. markets, overall home prices still rose 1.5% from April—nearly twice the historical average for the month of May. And while any talk of home values and 2006 might set off alarm bells for some, the truth is that price gains would need to see deceleration at this rate for more than 12 months just to get us back to a ‘normal’ 3-5% annual growth rate.”
“That said, the pace of deceleration could very well increase in the coming months, as we’ve already begun to see in select markets such as Austin, Boise, and Phoenix.”
“The record-low listing inventory that had been driving these price gains nationwide has also begun to improve, albeit slightly. Indeed, even with an increase in active listings of 107,000 in May—nearly double the traditional seasonal rise for the month—we are still 60% below the number of active listings we would normally see at this time of year,” Graboske continued. “All major markets are still facing inventory deficits, but some have seen their shortages shrink much faster than others. Among these are some of the hottest housing markets in recent years: San Francisco, San Jose, and Seattle. Unsurprisingly, these are also among the markets seeing the strongest levels of cooling so far this year, with annual home price growth rates in each down more than three percentage points in recent months.”
The report also found that affordability is at its lowest point since the mid-1980s with rates up 11% to near 6% for a 30-year mortgage. In addition, it found that the average home is now six times the median household income, the largest multiple on record since the early 1970s.
As of mid-June, it takes 36.2% of the median household income to make the mortgage payment on an average-priced home purchase, well above the previous peak seen by the market in 2006 when it stood at 34.1%.
Click here to view the report in its entirety.
