Fast-rising mortgage rates have more than doubled this year. Combined with record high home prices, many prospects are being pushed out of the market.
But recent data from a mortgage lending data expert offers some comfort.
Each month, the Black Knight Mortgage Monitor looks at a variety of issues related to housing prices, affordability and inventory levels across the country.
Data for August 2022 show that house prices continue to fall outside the pandemic peak, with one region of the country in particular seeing the biggest drop.
falling housing prices
The data showed median house prices fell 0.98% in August 2022, following a lead of just over 1% in July.
“The housing market has not seen a significant price decline in the past two months since immediately after the Lehman Brothers bankruptcy in the winter of 2008,” Black Knight said in its report.
The bankruptcy of Lehman Brothers in September 2008 marked the beginning of the global financial crisis and was a major catalyst for the financial collapse. It was the largest bankruptcy in U.S. history, and Lehman listed $639 billion in assets at the time.
Overall, average home prices are down 2.2% from their peak in June, at around $8,800. However, prices are still up 12.1% year-on-year as he saw record growth from late 2021 to early 2022.
Only time will tell what happens to these home prices as the market begins to enter its natural downseason.
Townhouses under the blue sky.via Getty Images
Where house prices are falling
Prices have been reduced from peak levels in 97 of the country’s 100 largest markets, including all of the top 50.
The biggest declines continue to be concentrated on the West Coast, but cracks are starting to form elsewhere, Black Knight said.
The steepest median home price decline was in San Jose at 13%, followed by San Francisco at 10.8% and Seattle at 9.9%.
Las Vegas, Austin, Minneapolis, Washington, Raleigh and Nashville have also seen home prices drop more than 3% in recent months, and the list of non-Western markets is likely to continue to grow, Black Knight said. I’m here.
The Southeast and Midwest saw a modest decline, with Detroit down 2.5%.
The Midwest has some of the most affordable cities today, requiring a pay-to-income ratio of about 25%.
A well-known mortgage payment method suggests homeowners spend no more than 28% of their gross monthly income on their home. The most affordable markets are mainly on the West Coast, where you’ll need about double that to buy an average-priced home.
San Francisco is likely to be the first market to see year-over-year home price declines for the year, according to Black Knight, with prices climbing 19.5% at the start of the year before remaining virtually flat through the end of August. There is
Neighboring San Jose may be in a similar position.
This story was reported from Detroit. Contributed by Associated Press.