February’s annual home price growth hit 19.6%.
Home Prices Posted in February Hit Strongest Annual Gains on Record
February’s combination of +19.6% home price appreciation, the strongest annual gains on record in February, and the sharp rise in mortgage interest rates created the tightest affordability in 15 years, according to Black Knight’s monthly Mortgage Monitor report.
CoreLogic’s latest Home Price Index (HPI) Report corroborated Black Knight’s findings by indicating that national home prices jumped +20% y/y in February. This February 2022 HPI gain was up from the February 2021 gain of +10% and the highest 12-month home price growth since 1976.
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Home Price Growth Smothers Affordability
It used to be, from 1995 – 2003, that homebuyers devoted just 25.1% of their median income to monthly mortgage payments on average priced homes. Now, as of the end of March 2022, homebuyers are having to devote 29.1% of their median income to monthly mortgage payments.
It now takes more than half the median income of typical homeowners to make monthly payments on an average-priced home in four large metro areas. Those metros include:
- Los Angeles – monthly payments take 61% of median incomes
- San Jose – monthly payments take 57.5% of median incomes
- San Diego – monthly payments take 55.5% of median incomes
- San Francisco – monthly payments take 50.9% of median incomes
Clearly, this affordability crisis “…is particularly acute in western coastal markets,” reported Black Knight.
Top 10 Markets for Annual Home Price Appreciation
- Tampa FL – +33.2%
- Austin TX – +33.0%
- Raleigh NC – +32.8%
- Phoenix AZ – +32.0%
- Nashville TN – +31.5%
- Jacksonville FL – +29.5%
- Orlando FL – +28.6%
- Las Vegas NV – +28.6%
- Miami FL – +27.0%
- San Diego CA – +27.3%
Distressed Properties Have NOT Filled Inventory Gap…Yet
As we’ve said 18,001 times in one way or another, scant inventory “…continues to fuel (home price appreciation) growth even,” according to Black Knight, “in the face of the tightest affordability in 15 years.”
Some industry experts indicated that many homeowners who had stopped making their mortgage payments during the pandemic would list their homes for sale when forbearance programs ended. Not so far…only 925,000 of the approximately 8.1M homes in forbearance have been put up for sale so far.
Status of Homes in Forbearance
Black Knight indicated the status of homes currently in forbearance currently:
- 744,000 loans remained in “active” forbearance as of March 22, 2022.
- Another 404,000 owners who were delinquent on their forbearance program loans were exploring mortgage modification options with their lenders to avoid foreclosure.
- 272,000 owners who had exhausted both forbearance and loss mitigation options remained past due.
- 74,000 owners were in foreclosure, an increase of +6% m/m, while foreclosure starts fell well below pre-pandemic levels to 25,000.
- The national delinquency rate remained near pre-pandemic levels as mortgage delinquencies climbed +1.8% in February 2022.
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Thanks to Black Knight, CoreLogic and Inman.
