Mortgage Rates

Stock Scarcity Sends Residence Costs Hovering At File Price

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Given the ongoing shortage of supply, the US real estate markets remained “white-hot” in April, with real estate prices rising at a record rate of 14.8 percent per year – and unsustainably.

Black Knight’s latest Mortgage Monitor Report recorded “the highest annual rate of house price growth we’ve seen” in records dating back nearly 30 years, said Ben Graboske, the company’s president for data and analysis, in a statement.

Western states posted the biggest gains with six metro markets – Austin, Texas; Phoenix, Arizona; Seattle, Washington; Riverside, Sacramento and San Diego, California – with an annual growth rate of 20 percent or more.

“The current rise in home prices is unsustainable, especially as mortgage rates begin to rise,” Black Knight analysts concluded in the report.

Ben Graboske

If real estate values ​​continue to rise at the current pace and mortgage rates rise, a key affordability measure, the payment-to-income ratio, will rise above the 25-year average of 23.6 percent. Anything above the current ratio of 20.5 percent is viewed as a “tipping point” where the appreciation of home prices usually slows, said Graboske.

If the interest on 30-year fixed-rate loans rose to 3.5 percent by the end of 2022, the national payment-income ratio would reach 21.6 percent by the end of this year and 25 percent by 2022.


Low mortgage rates fuel demand for housing, but Graboske said the more acute driver of price hikes is the lack of available supply.

“The total number of active entries in April fell by 60 percent compared to the average from 2017 to 2019,” said Graboske. This means that there were almost 750,000 fewer apartments on the market than usual. “It doesn’t get any better.”

Compared to the seasonal level before the pandemic, there were 26 percent fewer newly listed properties in April. With homes selling this fast, newly listed properties now account for more than 75 percent of listings, compared to 27 percent a year ago.

The decline in the volume of new offers will likely “create noticeable headwinds for both purchase credits and the volume of existing home sales,” the report said.

At the metro level, even the slowest growing markets are seeing “aggressive” price growth, the report said. Pittsburgh, Pennsylvania, had the lowest home price growth rate of the top 50 markets at 8.1 percent.

But that’s the highest “floor” Black Knight has ever seen – more than three times the previous high of 2.4 percent.

The top 10 metro markets with the strongest price increases were:

  • Austin, Texas (24.9 percent)
  • Phoenix, Arizona (24.4 percent)
  • Riverside, California (22.3 percent)
  • Seattle, Washington (20.8 percent)
  • Sacramento, California (20.8 percent)
  • San Diego, California (20.1 percent)
  • Salt Lake City, Utah (19.9 percent)
  • Providence, Rhode Island (18.1 percent)
  • Tampa, Florida (17.3 percent)
  • Jacksonville, Florida (17.0 percent)

Among the 50 largest housing markets, the 10 markets with the lowest price increases were:

  • St. Louis, Missouri (11.6 percent)
  • San Antonio, Texas (11.6 percent)
  • Orlando, Florida (11.0 percent)
  • New Orleans, Louisiana (10.9 percent)
  • Minneapolis, Minnesota (10.8 percent)
  • Birmingham, Alabama (10.8 percent)
  • Houston, Texas (10.3 percent)
  • Oklahoma City, Oklahoma (10.0 percent)
  • Chicago, Illinois (9.9 percent)
  • Pittsburgh, Pennsylvania (8.1 percent)

Many potential homebuyers have seen the headlines about rising house prices and a lack of supply in many markets. More than half (56 percent) think it’s a bad time to buy, according to a recent Fannie Mae poll. The survey also found that potential homebuyers know it’s tough out there, but a record percentage of consumers (72 percent) said they would buy a home if they moved.

Email to Matt Carter

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