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Rates are Applying the Brakes to Appreciation.

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The price applies the brakes thanks thanks.

The two-year surge in house prices seems to be a little cold. Black Knight states that the annual rate of increase in May has fallen for the second straight month. But has the damage already occurred?

The company announced in May Mortgage monitorPoints out that the annual price increase has fallen from 20.4% in April to 19.3% in May.that is The biggest negative fix in a month since 2006. Still, prices rose 1.5% from April to May – Almost twice the average historical acceleration for the month – And a profit of 10.8% during the first 5 months of the year. According to Black Knight, home price increases are typically 3-4 percent per year.

Deceleration is almost universal. Of the 100 largest markets in Miami, Omaha and Grand Rapids, only three haven’t braked a bit in the last six months. Price increases in Austin and Boise fell 12 percent, while Stockton (California), Phoenix and Seattle fell 5-6 points each. Still, gratitude in many areas remains bent. The three metros of Tampa, Laurie, Nashville and Miami still see an annual increase of over 30%, and all six are over 27% in the Sunbelt.

Ben Graboske, President of Black Knight Data & Analytics, said: The truth is that price increases need to slow at this rate for more than 12 months just to bring us back to a “normal” annual growth rate of 3-5%. That said, the pace of slowdown can be very high in the coming months, as we have already begun to see in some markets such as Austin, Boise and Phoenix. “

With a continuous pace of price increases and interest rates close to 6%, Black Knight says affordable housing is the worst since the mid-1980s.At that time, when the Federal Reserve hiked Degree of interest Double-digit to knock back inflation, the ratio of payments to mortgage income has risen to more than 50 percent. Not so bad yetHowever, in May, monthly principal and interest payments for 80% of the average home’s mortgage will exceed $ 2,100 for the first time, consuming 36.2% of the median household income.

In the 1980s, Affordable pressure was almost entirely price driven. Today, it is both prices and home prices that are crushing affordability. Currently, average home prices are more than six times the median household income.

Even before the pandemic, one of the main drivers of home prices was the shortage of homes for sale. There are some hopes on that side. Home inventories may have increased by a maximum of 107,000 over the last five years as new listings begin to normalize and existing listings have been on the market for a long time. Still, inventory remains in the 60% deficitThere are about 770,000 fewer properties on the market than usual.

New listings in May increased 6% year-over-year, but were still 6% below the pre-pandemic average for the month. The inventory increase is in the pending sales category. These numbers have decreased by 75% since January and are “decreasing rapidly.” According to the company, this is not suitable for transaction revenue.

Mortgage monitor too Updated rate lock number And, of course, it turns out that refinancing is “almost gone in the last few months.” They are down 90% from May last year, accounting for less than 5% of the rate lock on the Black Knight platform that month. Even cash-out refis and buy locks are less sensitive to rising interest rates and are beginning to recede.

May cashout locks were down 42% year-on-year. Data in early June suggest that the month could fall to 50%. The purchase lock in May was flat, but when we adjusted the quantity to reflect this year’s price hike, it actually fell 8.5%. June figures suggest that purchase locks by volume could be -14% and price adjusted to -21%.

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