That’s it everyone, home price appreciation has officially slowed its growth for the tenth consecutive month, according to a recent report from Black Knight.
And Black Knight’s data further proves the slowdown is coming in fast.
“At the end of December, home prices at the national level had fallen 0.3% from November for their fourth consecutive monthly decline," said Black Knight's Data & Analytics President Ben Graboske. "As a result, the average home has lost more than $2,400 in value since the summer of 2018.”
“And while home prices are still up on an annual basis, the slowdown continues nationwide and, importantly, is not being driven by seasonal effects,” Graboske continued. “December marked the 10th straight month of slowing annual home price appreciation, falling from a high of 6.8% annual growth in February to 4.6% at the end of the year.”
But hey don’t fret, Graboske believes the slowdown could give way to an increase in home sales from many prospective homebuyers.
"There is good news in these numbers for prospective homebuyers, though. Combined with the average 30-year fixed rate declining by more than half a point over the last three months, housing is now the most affordable it's been since early in the 2018 home-buying season,” Graboske said. “It currently requires 22.2% of median income to purchase the average home with a 20% down payment on a 30-year fixed-rate loan.”
Graboske notes this figure is down from a post-recession high of 23.4% just a few months ago, and well below the long-term average of 25% seen in the late 1990s through the early 2000s.
“The recent decline in rates has translated into a more than 6% increase in a homebuyer's purchase power – while keeping monthly payments the same – or a decrease of $62 a month in principal and interest on the average home bought with 20% down.”
Overall, Graboske says while this is all welcome news for consumers heading into the spring home-buying season, the housing market will just have to see whether rate declines and easing affordability will be enough to halt the deceleration in home price growth.