Mortgage Payment to Income Ratio Getting Into Pre-Meltdown Territory

Black Knight's latest Mortgage Monitor report was released this morning and it provided more timely insight on home price appreciation than last week's home price indices (HPIs) from FHFA and S&P Case-Shiller. The Mortgage Monitor's price data covers February whereas the other HPIs were limited to January. We already know that mortgage rates moved higher at a fairly brisk pace in January, but it was either too little or too late to make a difference in February's price appreciation. Black Knight recorded its highest year-over-year home price growth on record of 19.6%. Notably, the annual growth rate was at least 10% in all of the nation's 100 largest markets for the first time on record, with the top five slots (Tampa, Austin, Raleigh, Phoenix, Nashville) all over 30%. While these appreciation figures are very much in line with the other HPIs, the Mortgage Monitor goes a step further and compares price growth to other data. One of the two key pieces of additional data is the average mortgage payment associated with the average-priced home. After all, rates are lower now than they were at the last price peak in 2006. Nonetheless, the difference in prices has now more than offset the difference in rates. Payment amounts only tell us so much about the current housing environment. Income has risen quite a bit since 2006. As such, the second key piece of data from Black Knight compares median incomes to average home prices to come up with a payment to income ratio. In other words, how much of the median family's income is needed to afford the average-priced home (20% down, 30yr fixed)?

April 4, 2022 Download our Mobile App: Download our Mobile App: Housing News Mortgage Payment to Income Ratio Getting Into Pre-Meltdown Territory Black Knight's latest Mortgage Monitor report was released this morning and it provided more timely insight on home price appreciation than last week's home price indices (HPIs) from FHFA and S&P Case-Shiller. The Mortgage Monitor's p... (read more) Mortgage Rate Watch Mortgage Rates Slightly Lower to Begin New Week Mortgage rates are fresh off their best week since early March in terms of outright improvement. The catch is that they were at the highest levels since late 2018 immediately before that. Market participants refer to these sorts of boun... (read more) MBS Commentary MBS Live Recap: Curve Steepening Helps MBS, but Keeps Broader Indecision Intact Curve Steepening Helps MBS, but Keeps Broader Indecision Intact We're looking to the first few days of April for some guidance as to how bonds are going to treat the current attempt to hold a ceiling in rates... (read more) Rob Chrisman Customer Service, Digital, Warehouse, Pricing Tools ; Non-QM, Jumbo, ARM News “Rob, my capital markets gal eliminated our ability to lock overnight at yesterday’s rates. I think that she’s being unreasonable. Your thoughts?” No, she’s not. Overnight lock protection is one of the first things to go in a volatile rate environmen... (read more) Mortgage Rates Mortgage Rates Slightly Lower to Begin New Week 30 Yr. Fixed Rate 4.84% -0.04% Rate Change Points Mortgage News Daily 30 Yr. Fixed 4.84% -0.04 0.40 15 Yr. Fixed 4.19% -0.03 0.40 30 Yr. FHA 4.42% -0.02 0.00 30 Yr. Jumbo 4.15% -0.03 0.00 5/1 ARM 3.93% -0.01 0.50 Updates Daily - Last Update: 4/4 15 Yr. Fixed Rate 4.19% -0.03% Rate Change Points Freddie Mac 30 Yr. Fixed 4.67% +0.25 0.80 15 Yr. Fixed 3.83% +0.20 0.80 5/1 Yr. ARM 3.50% +0.14 0.30 Updates Weekly - Last Update: 3/31 Rate Change Points Mortgage Bankers Assoc. 30 Yr. Fixed 4.80% +0.30 0.56 15 Yr. Fixed 4.01% +0.25 0.55 30 Yr. Jumbo 4.40% +0.29 0.44 Updates Weekly - Last Update: 3/30 MBS / Treasuries MBS Live Recap: Curve Steepening Helps MBS, but Keeps Broader Indecision Intact UMBS 30YR 3.5 100.00 +0.14 Price / Yield Change MBS UMBS 3.5 100.00 +0.14 UMBS 4.0 101.88 +0.08 GNMA 3.5 100.50 +0.17 GNMA 4.0 101.95 +0.19 Pricing as of: 4/4 5:21PM EST 10 Year US Treasury 2.3970 +0.0075 Price / Yield Change US Treasury 2 YR Treasury 2.422 -0.040 5 YR Treasury 2.549 -0.017 7 YR Treasury 2.503 -0.005 10 YR Treasury 2.397 +0.008 30 YR Treasury 2.459 +0.024 Pricing as of: 4/4 5:21PM EST Latest Video Odds of a recession in 2023 are going up, says Strategas CEO Jason Trennert The 2pm Bond Report - April 4, 2022 Fed normalizing will help boost business reinvestment, says David Bahnsen The 9am Bond Report - April 4, 2022 Around the Web Calculated Risk Blog Black Knight Mortgage Monitor for February: "Tightest affordability in 15 years" Calculated Risk Blog Housing Inventory April 4th Update: Inventory up 0.7% Week-over-week; Up 5.9% from Seasonal Bottom Calculated Risk Blog Update: Framing Lumber Prices: Down from Recent Peak, Up Triple from 2 Years Ago Calculated Risk Blog It is the Change in Monthly Payment that Matters Reuters U.S. yield curve inverts after strong jobs data; world shares mixed Fannie Mae Fannie Mae Introduces Expanded Housing Choice Initiative to Increase Access to Affordable Housing for Voucher Holders Calculated Risk Blog Q1 GDP Forecasts: Barely Positive Reuters U.S. job growth solid in March; unemployment rate falls to 3.6% CNBC The Fed's preferred inflation gauge rose 5.4% in February, the highest since 1983 CNBC The hot jobs market could mean big gains for March payrolls and wages cnbc Euro zone inflation hits another record high of 7.5% CNBC ECB will have to 'think again' on policy if outlook deteriorates rapidly, chief economist says Calculated Risk Blog Construction Spending Increased 0.5% in February

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