Home prices fell for the third straight month and home equity fell in Q3 as rates continued to climb, according to Black Knight’s September Mortgage Monitor Report.
- M-O-M: Black Knight’s Home Price Index reported the median home prices falling 0.52% in September, this was the third straight decline but was less than half of the declines in July and August.
- Y-O-Y: Despite the declines, home prices are still up 10.7% year-over-year, down from 12.1% in August and is down almost half from the 20.4% peak reported in March.
Bad Time In Cali. California has 3 of the top5 markets for home price declines with San Jose leading the way with prices off 13.3% from the 2022 peak followed by San Francisco (-12.1%) at #2 and San Diego (-8.2%) at #4.
- Seattle was number three with a 10.8% drop and Phoenix was number five with a 7.6% drop.
Florida Still Hot. Florida is the exact opposite of Cali with 4 of the top 5 markets with the highest home price growth rates year-over-year. Miami took the top spot with home prices up 22.7% followed by Tampa (+19.8%), Orlando (+18.9%), and Jacksonville (+16.5%) at number 5.
- Dallas, TX was the only non-Florida market in the top five with 17.2% growth in the number four spot.
Less Equity. Homeowner equity is down $1.5T (8.4%) from the May 2022 peak with the average borrower down about $30k. However, even with recent declines, homeowner equity is up $5T total and 92,000 for the average mortgage holder from the start of the housing boom in 2020.
- Fewer than 500k homes are currently underwater nationwide.
Amazing Stat. I know I mentioned this last week, but this must be reiterated. With the 30-year rate at 7.08% as of October 27, just 133K high-quality refinance candidates remain – the smallest such population on record.
BOTTOM LINE: Home prices are slipping along with equity but less than 1.0% of mortgaged properties are underwater.