Black Knight Inc BKI

-- The Black Knight HPI hit another all-time high in July, with the annual rate of growth jumping to +2.3% from a revised +0.9% in June

-- The reaccelerating annual growth rate was driven as much by the price declines of last July providing a lower starting point as it was by July 2023 gains themselves

-- August will likely see further reacceleration in annual growth with prices already up a seasonally adjusted 2.9% from August 2022 and 4.4% from the start of the year

-- At the same time, non-adjusted monthly gains fell below their 25-year average after significantly outpacing historical averages from February through June, signaling a slowdown may be underway

-- Though prices rose on both seasonally adjusted and non-adjusted levels, after five months of above average gains, July's 0.23% non-adjusted change was smaller than the 25-year average increase of 0.34% for the month

-- Seasonally adjusted price gains were observed in 99 of the 100 largest markets in July; however, growth rates cooled with three-quarters of markets experiencing smaller monthly gains than they had in June

-- Black Knight transaction and rate lock data both point to slowdowns in demand, with the seasonally adjusted price per square foot on closed sales falling alongside the average non-adjusted purchase price on locked loans

-- As extremely tight home affordability could continue to weigh on month-to-month growth, it will be worth keeping a close eye on monthly data trends as we move through Q3

-- With rates at 7.23% as of Aug. 24, the P&I payment to purchase the median-priced home using a 20% down, 30-year fixed-rate mortgage had risen to $2,423 – a 91% increase over just the past two years

-- It now takes 38.3% of the median household income to make the monthly payment on the median-priced home purchase, making housing the least affordable that it's been since 1984

JACKSONVILLE, Fla., Aug. 31, 2023 /PRNewswire/ -- Today, the Data & Analytics division of Black Knight, Inc. (NYSE:BKI) released a high-level summary of the latest Home Price Index for July 2023. Even with interest rates hovering near 7.25%, home price growth continued in July to push home prices to yet another record high. However, as Black Knight Vice President of Enterprise Research Andy Walden explains, there were some mixed signals in the market data for July, raising questions about a potential downshift.

"Home prices continued to rise in July, hitting a new record high for the third month running," said Walden. "After picking up some small momentum in May and June following 14 straight months of slowing, the annual growth rate spiked to 2.3% in July. Further reacceleration is likely on tap for August as well, given that adjusted prices are already up 4.4% so far this year. Even if seasonally adjusted prices were to stop rising tomorrow, annual home price growth would climb to +2.9% by August and cross +4% by November, simply due to price gains that are already 'baked in.' If price gains were to maintain their current pace – which is unlikely given how tight affordability has become – it would result in annual gains returning above 7.5% by the end of the year. Either way, further acceleration in annual appreciation is almost a certainty for August. But that's only half the story in July's data – the housing market is sending somewhat mixed signals.

"While home prices rose on both seasonally adjusted and non-adjusted bases, July's 0.23% non-adjusted month-over-month growth was smaller than the 0.34% non-adjusted increase July has seen on average over the past 25 years, suggesting a possible transition may be underway," Walden continued. "Indeed – in addition to monthly gains slowing below long-term averages – Black Knight rate lock and sales transaction data also points to lower average purchase prices and seasonally adjusted price per square foot among recent sales. All of these factors combined underscore the need to focus on seasonally adjusted month-over-month movements rather than simply relying on the traditional annual home price growth rate."

In other observations from the July 2023 Black Knight HPI, seasonally adjusted price gains were observed in 99 of the largest U.S. markets; however, growth rates cooled at the core-based statistical area (CBSA) level as well, with three-quarters of markets seeing smaller monthly gains than they had in June. Austin was the lone exception, with prices there continuing to fall on a month-over-month basis – albeit modestly at this point (-0.1%). Hartford, Conn., yet again saw the largest increase, up 1.6% from June, with the following cities seeing seasonally adjusted prices rise by 1.0% or more: Providence, R.I. 1.2%; Philadelphia 1.1%; Cleveland 1.0%; Pittsburgh 1.0%; Miami 1.0%; and Buffalo, N.Y., 1.0%. Price growth continues to be strongest in the Northeast and Midwest, with Western states seeing more noticeable slowing from June's growth rates as affordability continues to weigh heavily on those markets.

About Black Knight

Black Knight, Inc. (NYSE:BKI) is an award-winning software, data and analytics company that drives innovation in the mortgage lending and servicing and real estate industries, as well as the capital and secondary markets. Businesses leverage our robust, integrated solutions across the entire homeownership life cycle to help retain existing customers, gain new customers, mitigate risk and operate more effectively.

Our clients rely on our proven, comprehensive, scalable products and our unwavering commitment to delivering superior client support to achieve their strategic goals and better serving their customers. For more information on Black Knight, please visit www.blackknightinc.com/.

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