Black Knight: As Home Affordability Nears All-Time Low Amid Spiking Interest Rates and Still-Rising Prices, Borrower Behavior and Preferred Products Changing
Black Knight, Inc. reported a 2.3% increase in home prices for March, reflecting significant appreciation trends despite a slight decline in annual growth to 19.9% from 20.1% in February. With 30-year mortgage rates at 5.11%, homeowners now allocate 32.5% of median income for principal and interest payments, nearing 2006's record high of 34.1%. Affordability pressure is evident, particularly as 95 of the 100 largest U.S. markets fall short of long-term affordability benchmarks. The report also highlights increased popularity of adjustable-rate mortgages amidst these conditions.
- None.
- Home price appreciation slowed slightly, decreasing from 20.1% to 19.9%.
- Affordability pressures are mounting, with 32.5% of median income now required for principal and interest payments.
- A 50 basis point increase in rates could push affordability to the worst level in history.
- 95 of the 100 largest markets are now less affordable than historical benchmarks.
- Nearly 1.4 million ARMs may face payment increases due to rising underlying indexes.
- According to the Black Knight HPI, home prices rose
- Annual home price gains slowed very slightly in March, seeing
- With 30-year mortgage rates at
- That is within 1.6 percentage points of the all-time high
- A rise of just 50 more basis points in rates or a
- A full 95 of the 100 largest U.S. markets are now less affordable than their long-term (1995-2003) benchmarks, up from six markets at the start of the pandemic
- Thirty-seven markets -- representing nearly a third of the country -- are now the least affordable they've ever been
- Optimal Blue rate lock data has shown increases in adjustable-rate mortgages (ARMs) as they seek to navigate an ever-more challenging housing market
JACKSONVILLE, Fla., May 2, 2022 /PRNewswire/ -- Today, the Data & Analytics division of Black Knight, Inc. (NYSE:BKI) released its latest Mortgage Monitor Report, based upon the company's industry-leading mortgage, real estate and public records datasets. As home prices and interest rates continue their sharp upward climb, this month's report revisits the mounting affordability pressures resulting from these competing dynamics. According to Black Knight Data & Analytics President Ben Graboske, though home price appreciation slowed in March -- albeit very slightly -- 30-year mortgage interest rates above
"After accelerating for the last four months, the rate of annual home price growth actually slowed a bit in March," said Graboske. "Still, at
"As measured by the share of median income required to make the P&I payment on the average-priced home bought with
Leveraging rate lock data from Optimal Blue, a division of Black Knight, this month's Mortgage Monitor shows that these market dynamics have made ARMs increasingly more attractive to borrowers. Indeed, the spread between 30-year and ARM offerings is now the widest it's been since 2014, and within 20 basis points of an all-time high. As of mid-April, the average 5/1 ARM had a
While the ARM share is now at or near a post-Great Financial Crisis high, it still pales in comparison to the
Finally, though the appetite for "Expanded Guideline" purchase loans -- a proxy for the non-qualified mortgage (non-QM) market -- was all but non-existent early in the pandemic, rate locks on such loans have since hit a multi-year high driven by widening spreads, tightened affordability and increased investor appetite. While such loans only made up approximately
About the Mortgage Monitor
The Data & Analytics division of Black Knight manages the nation's leading repository of loan-level residential mortgage data and performance information covering the majority of the overall market, including tens of millions of loans across the spectrum of credit products and more than 160 million historical records. The combined insight of the Black Knight HPI and Collateral Analytics' home price and real estate data provides one of the most complete, accurate and timely measures of home prices available, covering
Black Knight's research experts carefully analyze this data to produce a summary supplemented by dozens of charts and graphs that reflect trend and point-in-time observations for the monthly Mortgage Monitor Report. To review the full report, visit: https://www.blackknightinc.com/data-reports/
About Black Knight
Black Knight, Inc. (NYSE:BKI) is an award-winning software, data and analytics company that drives innovation in the mortgage lending and servicing and real estate industries, as well as the capital and secondary markets. Businesses leverage our robust, integrated solutions across the entire homeownership life cycle to help retain existing customers, gain new customers, mitigate risk and operate more effectively.
Our clients rely on our proven, comprehensive, scalable products and our unwavering commitment to delivering superior client support to achieve their strategic goals and better serving their customers. For more information on Black Knight, please visit www.blackknightinc.com/.
For more information: | |
Michelle Kersch | Mitch Cohen |
904.854.5043 | 704.890.8158 |
View original content to download multimedia:https://www.prnewswire.com/news-releases/black-knight-as-home-affordability-nears-all-time-low-amid-spiking-interest-rates-and-still-rising-prices-borrower-behavior-and-preferred-products-changing-301537005.html
SOURCE Black Knight, Inc.
FAQ
What is the recent home price trend reported by Black Knight (BKI)?
How do current mortgage rates affect home affordability?
What challenges do current U.S. housing markets face?
What is the significance of adjustable-rate mortgages (ARMs) in the current market?