Black Knight Mortgage Monitor: Home Prices Increased in March; Prices Up 1.0% YoY

Record Low National Delinquency Rate

Note: The Black Knight House Price Index (HPI) is a repeat sales index. Black Knight reports the median price change of the repeat sales.

Press Release: Black Knight: Home Prices Up Again in March on Worsening Inventory Shortages and Modest Rise in Demand

Today, the Data & 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 in March, 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% in March at the national level,” said Walden. “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-over-month basis in 92% of all major U.S. markets. Fast forward to March, 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, March saw deterioration in supply among 90% of major markets. New listings aren’t filling the gap either – 30% fewer properties hit the market in March 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.”
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House Prices Increased in March

Here is a graph of the Black Knight HPI. The index is still up 1.0% year-over-year and will likely turn negative YoY soon.

• Nationally, home prices rose by 0.45% in March on a seasonally adjusted basis, slightly stronger than the revised 0.43% rise in the prior month

• On a non-adjusted basis, home prices were up 1.38% in March, roughly on par with the 10-year March average of 1.43% (typically the strongest monthly uptick each year)

• Despite prices strengthening this spring, annual home price growth continues to cool; prices were up just 1.0% on an annual basis, a backward-looking metric that has been falling by 1.3-1.4% each month since the start of 2023

• A continuation of recent trends would drop that annual home price growth rate to around 0% when April 2022 metrics are reported next month

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New Listings Down Sharply

And on new listings - comparing to the same month in the 2017 to 2019 period. Fewer and fewer new listings year-over-year.

• Home sales rose for the second consecutive month in March, with seasonally adjusted volumes up 13% from January’s low, but still roughly 13% below their pre-pandemic average

• At the same time, inventory challenges continue to worsen, with new listings 30% below pre-pandemic levels in March, deteriorating from -27% in February and -25% in January

• Active for-sale inventory (seasonally adjusted) fell for the sixth-consecutive month in March, hitting its lowest level since last April

• Given the modest rise in sales volumes, inventory represents 2.6 months of supply (seasonally adjusted), tipping the scale toward sellers after reaching a high of 3.2 months late last year

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Mortgage Delinquencies Decreased in March

Here is a graph on delinquencies from Black Knight. Overall delinquencies are at record lows.

• The national delinquency rate dropped 53 BPS to 2.92% in March, falling below 3% for the first time on record dating back to January 2000, and is down 13% year over year

• March’s 15.2% decrease in delinquencies was broad-based, with 30, 60 and 90-days past due all improving

• Serious delinquencies – those 90+ days past due – showed marked improvement, falling 51K to their lowest level since March 2020, with volumes shrinking in every state

• Every state saw overall delinquencies fall in March as well, with improvements ranging from 11.9% in Washington to 21.5% in Vermont

• The overall decline in delinquencies outpaced the typical March seasonal improvement of 10.5% attributable to borrowers using tax refunds and other seasonal revenue to catch up on late payments

There is much more in the mortgage monitor.