Black Knight: Mortgage Holders Lose $1.3 Trillion in Equity in Q3 as Price Correction Continues; Nationally, Homes Shed 2.6% of Value Over Past Three Months
According to the Black Knight Mortgage Monitor Report, median home prices decreased by 0.52% in September, marking three consecutive months of declines but at a slower rate. Homeowner equity saw a record drop of $1.3 trillion in Q3, the largest decline since 2009, with average borrower equity falling by $30K. Despite these corrections, equity levels remain strong, with homeowners holding $5 trillion above pre-pandemic levels. The report also highlights the impact of Hurricane Ian, affecting 2.5 million mortgaged homes in Florida.
- Home equity is still $5 trillion or 46% above pre-pandemic levels.
- Only 3.6% of mortgage holders are underwater or have less than 10% equity, significantly lower than pre-pandemic levels.
- $1.3 trillion in homeowner equity was lost in Q3, the largest quarterly decline on record.
- Equity among mortgaged homes is down nearly $1.5 trillion since May 2022.
- According to the Black Knight Home Price Index, median home prices fell
0.52% in September, continuing a three-month streak of declines -- but slowed at half the pace of the prior two months - Annualized appreciation slowed to
10.7% -- still more than twice long-term norms -- and, while indicative of continued correction, the1.2% decline from August is the smallest seen in four months - Despite price corrections, home values in the nation's 50 largest markets remain elevated by anywhere from
19% to66% since the start of the pandemic - Still,
$1 .3T (-7.6% ) in recently added equity vanished from the market in the third quarter, the largest quarterly dollar decline on record, and the largest on a percentage basis since 2009 - Equity among mortgaged homes is now nearly
$1 .5T (-8.4% ) off its May 2022 peak, with the equity of the average borrower down$30 K from earlier this year - While additional declines may be on the horizon, equity positions remain strong; at
$5T (46% ) above pre-pandemic levels, the average mortgage holder still has more than$92 K more equity than before - Though the number of underwater homeowners has climbed nearly 275K over the past four months --more than doubling the population -- fewer than 500K homes are currently underwater nationwide
- Nationally,
3.6% of borrowers are either underwater or have less than10% equity, roughly half the pre-pandemic share; a historically and extremely low share (0.84% ) are in negative equity positions
JACKSONVILLE, Fla., Nov. 7, 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. With home price corrections continuing across much of the country – albeit at a slower pace nationally than seen over the prior two months -- the impact on homeowner equity levels is becoming clear. As Black Knight Data & Analytics President Ben Graboske explains, after peaking in Q2 of this year, homeowner equity saw record levels of contraction in Q3 2022.
"In the span of just three months, U.S. mortgage holders saw a total of
"Also, as we've covered in prior Mortgage Monitors, the vast majority of homes at risk of falling underwater are those that were purchased in 2022 and late 2021, at or near pandemic-era peak prices. While these loans clearly deserve careful, ongoing monitoring, to put that into context, just
This month's Mortgage Monitor also draws upon Disaster Alerts and McDash Flash daily mortgage performance data from Black Knight to assess the impact from Hurricane Ian in Florida. The 2.5M mortgaged homes in FEMA-declared, county-level disaster areas carry an aggregate unpaid balance of more than
Combining pinpointed impact areas from Disaster Alerts with McDash Flash daily loan-level performance data allows Black Knight to compare payments received in affected areas through Oct. 19 to the share received as of the same point in September. In Florida, counties not declared disaster areas,
Much more information on these and other topics can be found in this month's 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/
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/.
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SOURCE Black Knight, Inc.
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