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  • Jonathan Poyer

February Home Prices See First Monthly Rise After Seven Straight Declines

Black Knight has shared some very interesting data and analytics about housing. We will share below most of the report as it is quite interesting.

First, let's peek at the 30-year mortgage rate:

Where is that 30-year mortgage rate going to be in a year? Nobody knows but the state of housing is in an interesting way.

Here are some stats from the report with some analysis following:

  • Home prices rose in February on both non-adjusted and seasonally adjusted bases, driven by a combination of modestly easing affordability in January and early February along with worsening inventory levels

  • Sales were up in the month on interest rate dips according to Collateral Analytics data from Black Knight, but remained 18% below 2019 pre-pandemic averages as affordability pressures continue to weigh on demand

  • Inventory levels continued to deteriorate, with the seasonally adjusted number of homes available for sale falling for the fifth consecutive month to their lowest level since May of last year

  • Adjusted for seasonality, prices were up 0.16% in February – the strongest single-month gain since May 2022 – while at the same time, at 1.94%, annual home price growth fell below 2% for the first time since 2012

  • The national annual growth rate is expected to fall below 0% by April, but this could be a temporary milestone should inventory challenges persist and interest rates ease

  • Home prices are now -2.6% off their 2022 seasonally adjusted peak nationally, a marginal strengthening from -2.7% in January

  • More noteworthy, 39 of the 50 largest U.S. markets saw home prices rise on an adjusted basis in February; that’s in sharp contrast to this past November, when prices were falling in 48 of 50 markets

  • February’s price strengthening also helped shore up homeowner tappable equity levels, which are now $1.6T off peak (-15%); collectively, homeowners with mortgages still have $9.3T in tappable equity available

  • Though down from $210K early last year, the average mortgage holder still has $178K in tappable equity to borrow against while retaining a healthy 20% equity stake in the home

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 data sets. After seeing home prices pull back for seven consecutive months at the national level, and likely spurred by homebuyers reacting to a dip in 30-year interest rates, the Black Knight Home Price Index showed something of a rebound occurring in many areas of the country in February.

This month’s report also surveys the equity landscape to find that February’s price gains have also helped to shore up what had been falling homeowner equity levels. At $14.6T, overall total equity for mortgage holders is now down $2.0T (-12%) from its 2022 peak. Tappable equity – the amount available for withdrawal while maintaining a 20% equity stake in the property – was down $1.6T (-15%). Even so, tappable equity was at $9.3T as of February month-end, which is still up 56% (+3.4T) over the past three years. The average mortgage holder has $178K in tappable equity, down from more than $210K early last year, but still $61K (54%) above the market average three years ago. The total current combined loan-to-value (CLTV) ratio for the mortgage market now sits at 46.8%, noticeably higher than the record low of just under 43% early last year, but historically still very low, and below any level prior to 2021.

So much to unpack but we thought that posting this would be worthwhile.

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