Slower home price growth, deflated sales, and lower mortgage rates could create abundant opportunities for potential home buyers this spring.
Though home prices are still up year over year in all 50 states, the overall affordability outlook is improving, according to Black Knight’s latest Mortgage Monitor Report.
The decline in mortgage rates has helped increase consumers’ buying power by more than 6 percent and reduced mortgage payments on an average-priced home by $62, according to the report.
“There is good news in these numbers for prospective home buyers,” says Ben Graboske, president of Black Knight’s data and analytics division. “
Combined with the average 30-year fixed-rate mortgage declining by more than half a point over the last three months, housing is now the most affordable it’s been since early in the 2018 homebuying season.”
Home prices have slowed the most on the West Coast, particularly in California and Washington, the report notes. For example, California has seen its annual rate of appreciation drop from more than 10 percent in February 2018 to 3 percent at the end of 2018. The slowdown is most apparent in San Jose, Calif., San Francisco, and Seattle.
Nationwide, annual home price appreciation slowed for the 10 consecutive months ending in December 2018.
Home price appreciation has dropped from a high of 6.8 percent annual growth in February 2018 to 4.6 percent by the end of the year, according to Black Knight. The lower home prices and mortgage rates will certainly help buyers who had been struggling with affordability, the report notes.
Still, “while this is all welcome news for consumers heading into the spring homebuying season, it remains to be seen whether recent rate declines and easing affordability will be enough to halt the deceleration in home price growth,” Graboske notes.
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