Black Knight: Home Price Increases Stretch Affordability

June 5, 2018

Black Knight, Jacksonville, Fla., said rising home prices and interest rates have increased the monthly payment on a median-priced home purchased with a 20 percent down payment by $150 per month since the beginning of the year.

The company’s monthly Mortgage Monitor report said despite a month-over-month slowdown in home price appreciation to 6.5 percent in March, that and interest rate increases have made monthly mortgage payments 14 percent higher since the start of 2018.

Ben Graboske, Black Knight Executive Vice President of Data and Analytics, said stronger-than-average income growth in recent years still hasn’t been enough to keep up with rising HPA and interest rates.

“Seven states are now less affordable than their long-term norms and another 12 are close to hitting that point,” Graboske said. “Though much of the country remains more affordable than long-term norms, the current trajectory would change that sooner rather than later.

The report said Washington, D.C., requires the largest share of median income (40 percent) to purchase the median-priced home, followed by California (38 percent), Hawaii (35 percent) and Maine (33 percent).

“In recent years, incomes have been growing at a rate of 4.37 percent annually, as compared to a 2.75 percent 25-year average,” Graboske said. “Even so, a half-percentage point increase in interest rates each year, combined with the current rate of HPA, would push affordability to an all-time low by 2023.”

Black Knight reported the total U.S. loan delinquency rate fell to 3.67 percent, a monthly drop of 1.60 percent. The total U.S. foreclosure pre-sale inventory rate fell to 0.61 percent, a drop of 2.26 percent.

The report said states with highest percentage of non-current loans were Mississippi, Louisiana, Florida, Alabama and West Virginia; states with the lowest percentage were Colorado, Oregon, North Dakota, Washington and Minnesota. States with the highest percentage of seriously delinquent loans were Florida, Mississippi, Louisiana, Alabama and Texas.