“Early signs of housing market cooling”

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:

30-year mortgage 10-year treasury

• 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

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