The two-year explosion in home prices appears to be cooling a bit. Black Knight says annual appreciation was down in May for the second straight month. But has the damage already been done? The company, in its May Mortgage Monitor , notes that annual price growth retreated from 20.4 percent in April to 19.3 percent in May. That was the largest negative correction in a single month since 2006. That still left prices up 1.5 percent from April to May – nearly twice the average historic acceleration for that month – and a gain of 10.8 percent during the first five months of the year. Black Knight says home price growth is typically 3 to 4 percent over an entire year. The slowdown is nearly universal. Only three of the 100 largest markets, Miami, Omaha, and Grand Rapids, have not braked a bit over the last six months. Price gains in Austin and Boise have decelerated by 12 percentage points, while Stockton (California), Phoenix, and Seattle have dropped back by 5 to
Black Knightâs Monthly Monitor Report, released today, found that May marked the second-consecutive month of cooling at the national level. However, even with growth slowing in 97 of the top 100 U.S. markets, overall home prices still rose 1.5% from April.
Although inventory shortages are starting to ease, falling sales are driving the trend as homes are less affordable then they've been since the mid-1980s.
While rising home prices and volatile interest rates continue to compound the affordability pressures in the housing market, the same dynamics have also served to increase the housing wealth of American mortgage holders by a significant margin.
In the first quarter of 2022, it was the best of times for homeowners, and the worst of times for homebuyers. As home prices and interest rates continue to rise, mortgage holders have seen their tappable equity the amount available for them to borrow against while retaining a 20% equity stake in their homes reach another all-time high in the first quarter of this year.