White-Hot Housing Market and Rising Rates Push Affordability Back to 5-Year Average; Low New Listing Volumes Further Constraining Inventory
- According to the repeat sales-based Black Knight Home Price Index, home prices were up 11.6% in February, the highest annual rate in more than 15 years
- Likewise, home sales data tracked by the company’s Collateral Analytics group show a 15.9% year-over-year increase in the median single-family sales price in February
- Nearly three-quarters of the 100 largest U.S. markets saw annual home price growth of 10% or more, with 75% of ZIP codes rated either “Strong” or “Hot” based on underlying market metrics
- Sharp rises in both home prices and interest rates have driven affordability to its lowest point since mid-2019
- It now takes 20% of the median household income to make monthly payments on an average-priced home – back to the 5-year average but still stronger than the 20-year average of 23.4%
- Thus far in 2021, new listing volumes have failed to make up for the shortfall of 2020 and were down 16% and 21% year-over-year in January and February, respectively
- The 125,000 fewer listings over the first two months of 2021 compared to 2020 have pushed for-sale inventory 40% below last year’s level and trending in the wrong direction
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