Home Price Growth Slows at Quickest Pace in 50-Years

Home price growth is slowing and slowing quickly. In fact, home price growth slowed month-over-month at the fattest pace in 50 years, according to the latest Black Knight Mortgage Monitor Report…(Black Knight)

• Annual home price growth dropped by nearly two percentage points in June to 17.3%. This is the greatest single-month slowdown on record since at least the early 1970s.

• The rate of slowing jumped 66% from May.

NOTE: June’s slowdown was record-breaking however, home price growth would need to decelerate at this pace for six more months to drive annual appreciation back to a rate more in line with long-run averages of around 5%.

It’s important to note that while national data only saw a slowdown in prices local data in some markets was more pronounced. In 25% of major markets, home price growth rates slowed by three percentage points, with four of those decelerating by four or more points in June alone. In fact, in some markets prices have already pulled back from the highs. San Jose, California saw the biggest pullback at -5.1% followed by Seattle (-3.8%) and San Francisco (-2.8%).

Helping to explain the slowdown in prices has been the increase in inventory levels. The number of homes listed for sale has now risen by 114K (+22%) on a seasonally adjusted basis over the past two months.

• NOTE: Inventory is still 54% below 2017-2019 levels which is a 716K listings shortfall, it would take more than a year of such record increases for inventory levels to fully normalize.

Foreclosure starts and delinquencies were up big but looks can be deceiving especially when you compared to pre-pandemic levels…

• Foreclosures starts jumped 26.6% from the previous month and were more than 5X last year’s moratorium-suppressed total, but remain more than 40% below pre-pandemic levels.

• The national delinquency rate rose to 2.84% in April, up 9 BPS, but still below the long-run average