Black Knight’s Mortgage Monitor: Despite Continued Home Price Acceleration, Housing Remains More Affordable Than Long-Term...
November 07 2017 - 9:00AM
Today, the Data & Analytics division of Black Knight, Inc.
(NYSE:BKI) released its latest Mortgage Monitor Report, based on
data as of the end of September 2017. Given continued acceleration
in the rate of home price appreciation observed across most of the
country, Black Knight thought it pertinent to examine both the
current state of home affordability as well as potential impacts of
future home price and interest rate increases on the home
affordability landscape.
“Rising home prices continue to offset the majority of would-be
savings from recent interest rate declines, which has kept home
affordability near a post-recession low,” said Ben Graboske,
Executive Vice President - Data & Analytics, Black Knight.
“That being said, when viewing the market through a longer-term
lens, affordability across most of the country still remains
favorable to long-term benchmarks.”
As of September, 21.4 percent of the median income nationwide
was needed to purchase the median-priced home, just slightly behind
the post-recession peak of 21.8 percent seen in July. But, even
with the monthly payment needed to purchase the median-priced home
up $100 from one year ago, the national “payment-to-income” ratio
remains 2.8 percent below the 24.2 percent average in the late
1990s and 4.9 percent behind the 26.2 percent average from
2000-2003 prior to the run-up in home prices that eventually peaked
in 2006.
“In looking at the affordability landscape across the country,
we certainly see varying levels of affordability in each market
compared to their own long-term benchmarks,” Graboske explained.
“But, by and large, the overall theme is that affordability in most
areas, while tightening, remains favorable to long-term norms.”
When looking at state-level data, payment-to-income ratios in 47 of
50 states remain below their 1995-2003 averages. Only Hawaii,
California, Oregon, and Washington, D.C., have higher
payment-to-income ratios today than their longer-term
benchmarks.
A question that certainly bears asking is how long the current
rate of home price appreciation can continue. After all, according
to the August Black Knight Home Price Index, the annual rate of
home price appreciation has accelerated from 5.6 percent entering
the year to over 6.2 percent as of August 2017. Under optimistic
scenarios, most states remain below long-term benchmarks even with
home prices rising at current rates for another year. However,
under pessimistic scenarios -- including significant increases in
the 30-year fixed interest rates -- affordability could surpass
long-term norms in a number of states by this time next year.
In addition to affordability, Black Knight also took an in-depth
look at the effect of recent hurricanes on mortgage performance and
determined that Hurricanes Harvey and Irma have likely accounted
for an increase of 135,800 past-due mortgages nationwide. The
combined impacts of these two storms, which are being credited with
a 27 bps rise in the national non-current rate – has already
surpassed that of Hurricane Katrina in 2005 and is expected to
increase further in October results, where the heaviest impact from
Hurricane Irma is expected to be seen.
|
As was
reported in Black Knight’s most recent First Look release, other
key results include: |
|
Total U.S. loan
delinquency rate: |
4.40% |
|
Month-over-month change
in delinquency rate: |
11.85% |
|
Total U.S. foreclosure
pre-sale inventory rate: |
0.70% |
|
Month-over-month change
in foreclosure pre-sale inventory rate: |
-7.17% |
|
States with highest
percentage of non-current* loans: |
MS, LA, FL, AL, TX |
|
States with lowest
percentage of non-current* loans: |
WA, MN, OR, ND, CO |
|
States with highest
percentage of seriously delinquent** loans: |
MS, LA, AL, AR,
TN |
*Non-current totals combine foreclosures and delinquencies as a
percent of active loans in that state.**Seriously delinquent loans
are those past-due 90 days or more.Totals are extrapolated based on
Black Knight’s loan-level database of mortgage assets.
About the Mortgage Monitor The Data &
Analytics division of Black Knight Financial Services manages the
nation's leading repository of loan-level residential mortgage data
and performance information on the majority of the overall market,
including tens of millions of loans across the spectrum of credit
products and more than 160 million historical records. The
company's research experts carefully analyze this data to produce a
summary supplemented by dozens of charts and graphs that reflect
trend and point-in-time observations for the monthly Mortgage
Monitor Report. To review the full report, visit:
http://www.BKFS.com/CorporateInformation/NewsRoom/Pages/Mortgage-Monitor.aspx
About Black KnightBlack Knight
is a leading provider of integrated software, data and analytics
solutions that facilitate and automate many of the business
processes across the homeownership lifecycle.
Black Knight is committed to being a premier business
partner that clients rely on to achieve their strategic goals,
realize greater success and better serve their customers by
delivering best-in-class software, services and insights with a
relentless commitment to excellence, innovation, integrity and
leadership. For more information on Black Knight, please visit
http://www.blackknightinc.com/.
For more information:
Michelle Kersch904.854.5043michelle.kersch@bkfs.com
Mitch Cohen646.926.7741mitch@mprg.com
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