24 | June 2023 REAL ESTATE
HOME PRICES UP AGAIN WORSENING INVENTORY SHORTAGES AND MODEST RISE IN DEMAND
By d-mars.com News Provider
he data and analytics division of Black Knight, Inc. (NYSE: BKI) released its latest Mortgage Monitor report, based on the company’s industry-leading mortgage, real estate and public records data sets. A modest rise in homebuyer demand led to home prices strengthening for the third consecutive month as both January and February were upwardly revised to show positive movement in prices. As Black Knight Vice President of Enterprise Research Andy Walden explains, while historical trends would suggest an increase of new listings in the spring, the inventory shortage at the root of this home price strengthening has instead worsened as the country moves further into the traditional homebuying season. “Home prices rose a seasonally adjusted 0.45% at the national level,” said Walden.
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A modest bump in homebuyer demand ran headlong into falling for-sale supply, leading to the third consecutive monthly increase in home prices after they’d been pulling back from recent peaks through the tail end of 2022, essentially nationwide. In fact, just five months ago, prices were declining on a seasonally adjusted month-overmonth basis in 92% of all major U.S. markets.
Fast forward to now, and the situation has done a literal 180, with prices now rising in 92% of markets from February. Despite the home price strengthening of these past couple of months, the backward-looking annual growth rate continued to cool as the influence of the red-hot spring 2022 market fades in the rearview mirror. Prices are now up just 1.0% year over year, with the annual growth rate on track to fall to roughly 0% by April. That said, low inventory levels will limit just how far that metric will fall in coming months. “The strengthening in home prices is the direct result of a second month of modest increases in sales volumes meeting a continually shrinking for-sale inventory. Our Collateral Analytics data showed the supply of active listings fell for the sixth straight month, to the lowest level since April 2022. On top of that there was a deterioration in supply among 90% of major markets,” per Black Knight. They added, “New listings aren’t filling the gap
either – 30% fewer properties hit the market in June as compared to pre-pandemic norms. That deficit’s now increased in each of the last six months and is up from -27% in February and -25% the month before. Given the modest rise in sales volumes, current available inventory represents just 2.6 months of supply on a seasonally adjusted basis, tipping the scale back toward sellers in a tightly constricted market.” This month’s report also draws upon daily rate lock data from Optimal Blue, a division of Black Knight, to help gauge the impact of today’s volatile rate environment on mortgage lending activity. Rates remained volatile through March and April – from a high of 6.85% to 6.21% by early April, then back up above 6.5% by the middle of the month. More noteworthy in recent weeks is the pullback in purchase rate lock volumes despite overall lower mortgage rates than we saw in March. Through April 26, rates have averaged 6.38% for the month, down from the 6.56% average daily rate for the month of March. While rates have eased, and the heart of the traditional home buying season takes hold, purchase rate locks have pulled back in recent weeks, falling 18% (unadjusted) from their late highs. Likewise, refinance volumes are down 17% among cash-outs and 24% among rate-term refits since mid to late March. This trend is worth watching closely in the coming weeks given the delicate balance of supply and demand in today’s market. Granular, timely data has become ever more essential as the market continues to sift through each new shred of economic news in hopes of predicting how the Federal Reserve and broader economy will react.
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Source: PR NewsWire
