-- The Black Knight HPI hit another all-time high in July,
with the annual rate of growth jumping to +2.3% from a revised
+0.9% in June
-- The reaccelerating annual growth rate was driven as much
by the price declines of last July providing a lower starting point
as it was by July 2023 gains
themselves
-- August will likely see further reacceleration in annual
growth with prices already up a seasonally adjusted 2.9% from
August 2022 and 4.4% from the start
of the year
-- At the same time, non-adjusted monthly gains fell below their
25-year average after significantly outpacing historical averages
from February through June, signaling a slowdown may be
underway
-- Though prices rose on both seasonally adjusted and
non-adjusted levels, after five months of above average gains,
July's 0.23% non-adjusted change was smaller than the 25-year
average increase of 0.34% for the month
-- Seasonally adjusted price gains were observed in 99 of the
100 largest markets in July; however, growth rates cooled with
three-quarters of markets experiencing smaller monthly gains than
they had in June
-- Black Knight transaction and rate lock data both point to
slowdowns in demand, with the seasonally adjusted price per square
foot on closed sales falling alongside the average non-adjusted
purchase price on locked loans
-- As extremely tight home affordability could continue to weigh
on month-to-month growth, it will be worth keeping a close eye on
monthly data trends as we move through Q3
-- With rates at 7.23% as of Aug. 24, the P&I payment
to purchase the median-priced home using a 20% down, 30-year
fixed-rate mortgage had risen to $2,423 – a 91% increase over just the past two
years
-- It now takes 38.3% of the median household income to make the
monthly payment on the median-priced home purchase, making housing
the least affordable that it's been since 1984
JACKSONVILLE, Fla., Aug. 31,
2023 /PRNewswire/ -- Today, the Data &
Analytics division of Black Knight, Inc. (NYSE:BKI) released a
high-level summary of the latest Home Price Index for July 2023. Even with interest rates hovering near
7.25%, home price growth continued in July to push home prices to
yet another record high. However, as Black Knight Vice President of
Enterprise Research Andy Walden
explains, there were some mixed signals in the market data for
July, raising questions about a potential downshift.
"Home prices continued to rise in July, hitting a new record
high for the third month running," said Walden. "After picking up
some small momentum in May and June following 14 straight months of
slowing, the annual growth rate spiked to 2.3% in July. Further
reacceleration is likely on tap for August as well, given that
adjusted prices are already up 4.4% so far this year. Even if
seasonally adjusted prices were to stop rising tomorrow, annual
home price growth would climb to +2.9% by August and cross +4% by
November, simply due to price gains that are already 'baked in.' If
price gains were to maintain their current pace – which is unlikely
given how tight affordability has become – it would result in
annual gains returning above 7.5% by the end of the year. Either
way, further acceleration in annual appreciation is almost a
certainty for August. But that's only half the story in July's data
– the housing market is sending somewhat mixed signals.
"While home prices rose on both seasonally adjusted and
non-adjusted bases, July's 0.23% non-adjusted month-over-month
growth was smaller than the 0.34% non-adjusted increase July has
seen on average over the past 25 years, suggesting a possible
transition may be underway," Walden continued. "Indeed – in
addition to monthly gains slowing below long-term averages – Black
Knight rate lock and sales transaction data also points to lower
average purchase prices and seasonally adjusted price per square
foot among recent sales. All of these factors combined underscore
the need to focus on seasonally adjusted month-over-month movements
rather than simply relying on the traditional annual home price
growth rate."
In other observations from the July
2023 Black Knight HPI, seasonally adjusted price gains were
observed in 99 of the largest U.S. markets; however, growth rates
cooled at the core-based statistical area (CBSA) level as well,
with three-quarters of markets seeing smaller monthly gains than
they had in June. Austin was the
lone exception, with prices there continuing to fall on a
month-over-month basis – albeit modestly at this point (-0.1%).
Hartford, Conn., yet again saw the
largest increase, up 1.6% from June, with the following cities
seeing seasonally adjusted prices rise by 1.0% or more:
Providence, R.I. 1.2%;
Philadelphia 1.1%; Cleveland 1.0%; Pittsburgh 1.0%; Miami 1.0%; and Buffalo, N.Y., 1.0%. Price growth continues to
be strongest in the Northeast and Midwest, with Western states
seeing more noticeable slowing from June's growth rates as
affordability continues to weigh heavily on those markets.
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
|
michelle.kersch@bkfs.com
|
mitch.cohen@bkfs.com
|
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SOURCE Black Knight, Inc.