Home prices surged 19.6% annually in February, the highest home price growth ever recorded, according to the latest Mortgage Monitor report from mortgage technology and data provider Black Knight.
In fact, the average American home has now increased 34% in value since February 2020, just before the onset of the COVID-19 pandemic, the company said. This marks the fourth consecutive month that the rate of growth for home prices is increasing, rather than cooling off.
"After a brief cooling last fall, appreciation has been re-accelerating for the last four months," Ben Graboske, Black Knight's president of data and analytics said. "Indeed, a full three-quarters of the 100 largest U.S. markets – all 100 of which registered double-digit annual appreciation in February, it should be noted – are seeing re-acceleration of home price growth. And that is all while interest rates climbed nearly one-third of a percent in February and are now up more than 1.25% since the start of the year."
Homeowners who want to take advantage of their home’s rising value and possibly lower their monthly mortgage payment at the same time can do so through a cash-out refinance. Visit Credible to find your personalized interest rate without affecting your credit score.
Top 100 largest U.S. markets see double-digit annual growth, Black Knight says
Median home sales prices increased by 1.84% from January to February, nearly 400% more than the 25-year average for increases in February. And when considering the top 100 housing markets in America, each registered double-digit annual home price growth in February.
The city with the highest rate of home price appreciation was Tampa, Florida, according to Black Knight. There, median home prices rose 33.2% annually in February. Tampa was followed by 33% growth in Austin, Texas, then 32.8% growth in Raleigh, North Carolina and 32% in Phoenix, Arizona.
If home prices are surging in your city, you could consider a cash-out refinance to take advantage of the higher value of homes. Visit Credible to compare multiple lenders at once and choose the one with the best mortgage rate for you.
Home price and interest rate gains hurt affordability
Home affordability hit its worst point since the housing boom from 2004 to 2007, according to Black Knight. The average principal and interest payment for the average-priced home increased by 24%, or $329 year-to-date.
The increases are due to rising mortgage rates and high home prices amid limited inventory, the company says. It now takes 29.1% of median household income for homeowners to make their mortgage payment, up from 19.3% just 15 months ago.
"Entering the year, a prospective homebuyer who could budget a $1,700 monthly P&I payment – roughly the amount required to buy the average home today, excluding taxes and insurance – could afford a $497,000 house," Graboske said. "With Freddie Mac reporting the average 30-year rate at 4.42% on March 24, that same borrower can now afford less than $425,000."
If you’re looking to purchase a home in today’s market, you can explore your mortgage options by visiting Credible to compare rates and lenders and get a mortgage preapproval letter in minutes.
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