US house prices gain after 2 months, affordability weakest since 1984

investmentnews.com:

Homeownership remains a key goal for many Americans, but it continues to become one of the hardest to achieve with tight supply pushing up real estate prices and lowering affordability nationwide.

The latest stats show that prices are on the rise again with the Black Knight HPI recording an all-time high in July 2023 with annual growth at 2.3% from a revised 0.9% in June, although this was influenced by a decline in prices in July 2022.

For those saving hard to achieve homeownership, the firm’s assessment of the figures is concerning with the median-priced home now demanding more than 38% of the median household income, the highest share since 1984!

“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,’” warned Andy Walden, Black Knight VP of Enterprise Research. “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.”

Also this week, the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported 0.0% annual change in June, up from a loss of -0.4% in the previous month. The 10-City Composite showed a decrease of -0.5%, which is an improvement on the -1.1% decrease in the previous month.

“While home prices have remained strong in 2023, elevated mortgage rates complicate the situation for potential homebuyers, a trend that will likely constrain additional price gains for the rest of the year. Nevertheless, home prices are still expected to reaccelerate and reach mid-single-digit growth rate