on Estimated risk per 07/06/2022 10:32:00
Today in the Calculated Risk Real Estate newsletter: Black Knight Mortgage Monitor: “Early signs of housing market cooling”
An excerpt from the letter:
Note. The Black Knights availability data dates back to 1975.
And according to the ratio of payments to income:
• With 30-year rates hovering around 6% and home prices up nearly 11% since early 2022, affordability is at its lowest level since the mid-1980s, when the Fed’s sharp increases led to high double-digit mortgage rates , which resulted in a payment-to-income ratio of more than 50%
• The affordability issue at the time was driven almost entirely by interest rate conditions, while incomes largely kept up with rising house prices.
• As of mid-June 2022, paying off a mortgage when buying a home at an average price requires 36.2% of median household income, well above the post-1980s peak of 34.1% in July 2006.
• Monthly principal and interest (P&I) payments on an average house purchased at a 20% discount exceeded $2,100 for the first time on record, up almost $750 (55%) this year and nearly 2 times more than in US dollars. 1089 required at the start of a pandemic
There is much more in the article. You can subscribe to https://calculatedrisk.substack.com/
