A dwindling inventory of homes for sale is pushing home price growth rates to previously unseen levels, according to the latest Mortgage Monitor Report from the Data & Analytics division of Black Knight, Inc. (NYSE:BKI). This is negatively impacting home affordability, the company said.

“Home prices grew at 14.8% on an annual basis in April,” said Black Knight Data & Analytics president, Ben Graboske. “That’s the highest annual home price growth rate we’ve ever seen – and Black Knight’s been tracking the metric for almost 30 years now.”

Black Knight said that single-family homes saw the greatest gains, with prices up 15.6% from last April, also an all-time high, while condo prices are up 10%. 

Driving this growth are two key elements: historically low interest rates and – more acutely – the lack of available for-sale inventory, the company said. The total number of active listings was down 60% from the 2017 to 2019 average for April. 

“It’s not getting any better, either,” Graboske added. “Data from our Collateral Analytics group showed there was two months’ worth of single-family inventory nationwide in March, the lowest share on record and trending downward. In fact, there were 26% fewer newly listed properties in April as compared to pre-pandemic seasonal levels.”

The share of the median income needed to make the monthly payments on the median-priced home has risen to 20.5%, the company said. While still more affordable than the 25-year average of 23.6%, housing has surpassed its 5-year average of 20.1%. 

In recent years, 20.5% has roughly been the tipping point at which appreciation begins to decelerate, but given the severity of inventory shortages, home prices have continued to sharply accelerate even in the face of tightening affordability, Graboske said.

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