Black Knight: Lower Rates Boosted Home Affordability in June

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Mortgage rates dipped in June and, as a result, home affordability improved, according to Black Knight’s Mortgage Monitor report.

Also boosting affordability was slowing home price appreciation – particularly in the more expensive housing markets.

California went from having one of the top five home price growth rates of any state – 8.6% one year ago – to second-to-last as of June, with home price growth slowing to just 1.3% year-over-year.

While California is one of only two states that remain less affordable than their long-term norms, affordability in the state has improved significantly in recent months.

It now requires 34% of the median income to purchase the average home in California, down from 38% in November, according to the report.

Although home prices increased an average of 1.1% in Los Angeles, San Francisco, San Diego and Seattle, Wash., during the past 12 months, the rates at which they’re slowing have begun to taper.

Even in San Jose, where home prices are down by more than 6% from June 2018, the rate of decline has begun to flatten.

These are all good signs, given these markets’ sharp reaction to rising rates and tightening affordability in late 2018, Black Knight says.

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