Black Knight: Sellers Retreat From the Market, Increasing Inventory Shortage and Buoying Home Prices; Affordability Takes Step Back on Rising Interest Rates
Black Knight's Mortgage Monitor Report reveals a significant decline in for-sale housing inventory, marking four consecutive months of decrease, with January 2023 showing a 0.24% drop in home prices from December. Approximately 90% of U.S. markets are experiencing inventory shortages, while affordability is tightening, with home sales at a seven-year low. Rising interest rates have made homes unaffordable for many, consuming 33.2% of median household income for monthly payments. Despite a consistent decline in prices, the decrease in January was the smallest thus far, indicating that supply constraints are stabilizing home prices.
- January saw the smallest decline in home prices (-0.24%) in seven months.
- Despite inventory shortages, home prices remain higher due to limited supply.
- Home sales hit a seasonally adjusted seven-year low.
- Monthly payments on average homes consuming 33.2% of median income indicate worsening affordability.
- Collateral Analytics data from Black Knight showed January marking the fourth consecutive month of declines in for-sale inventory on a seasonally adjusted basis after seeing strong improvement in shortages early last year
- Months of supply has stagnated at approximately 3.1 in recent months as falling demand has been met with a weakening inflow of new listings, with
90% of U.S. markets facing growing inventory shortages - Though January marked the seventh consecutive month of falling home prices, the month's decline (-
0.24% from December; -0.13% on a seasonally adjusted basis) was the smallest yet in that time span - Growing supply shortages are holding home prices higher than they otherwise would be given current affordability constraints, as elevated rates continue to lock would-be sellers in place
- Half of all mortgaged homes have first-lien interest rates at or below
3.5% , a full 3 percentage points below today's market rate, while two-thirds are at4% or lower - Tight affordability continued to dampen demand, as home sales fell to a more than 7-year low in January on a seasonally adjusted basis
- Buyside activity had perked up when 30-year rates fell to near
6% in early February, but recent data has shown just how sensitive that demand is to rate movements - Sharply rising 30-year rates in February have weakened home affordability, with nearly all major U.S. markets remaining unaffordable as compared to their own long-run averages
JACKSONVILLE, Fla., March 6, 2023 /PRNewswire/ -- Today, the Data & Analytics division of Black Knight, Inc. (NYSE:BKI) released its latest Mortgage Monitor Report, based on the company's industry-leading mortgage, real estate and public records datasets. With both supply and demand in the housing market being impacted by a volatile interest rate environment, this month's report looks at the continuing – and worsening – shortage in for-sale inventory and the role it is playing in keeping affordability tight and buoying home prices. As Black Knight Vice President of Enterprise Research Andy Walden explains, growing supply shortages are holding home prices higher than they otherwise would be given current affordability constraints, as elevated rates continue to lock would-be sellers in place.
"The interplay between inventory, home prices and interest rates has been the defining characteristic of the housing market for the last two years, and this continues to be the case," said Walden. "Today, we see buyer demand dampened under pressure from rising rates and their impact on affordability, with purchase rate-lock volumes cooling in late February. However, when rates ticked down closer to
"Sharply rising 30-year rates in February have weakened home affordability, with nearly all major U.S. markets remaining unaffordable as compared to their own long-run averages. With 30-year rates at
This month's report draws further upon the Black Knight HPI – the timeliest and most granular in the industry – to look at January 2023 home price trends, finding that prices fell once again, pulling back by
The annual home price growth rate – which tracks growth over the prior 12 months – fell to
Much more information on these and other topics can be found in this month's Mortgage Monitor.
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/.
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