Black Knight Says Housing is the Least Affordable since the Mid-1980s
Black Knight’s Mortgage Monitor Report for May, 2022 says home prices rose 1.5% from April, which they say is nearly twice the historical average for the month of May. However, they say with 30-year mortgage rates hovering close to 6% and home prices up nearly 11% since the start of 2022, home affordability is at its worst point since the mid-1980s.
Black Knight says this affordability crisis is due in equal part to rising interest rates and soaring home values which are being driven by historically low inventory. Their data show that the average home price is now more than 6x the median household income, which is the largest multiple on record since the early 1970s. As of mid-June 2022, it takes 36.2% of the median household income to make the mortgage payment on the average- priced home purchase, well above the 34.1% post-1980s peak in July, 2006.
“This month we forego our regular look at the forbearance landscape to take a closer look at the effect of the recent rise in interest rates on refinance incentive, rate/lock volumes and the underlying credit quality of loans being originated. Finally, we examine changes in the housing market, including price growth, affordability and inventory trends.”
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