The two-year explosion in home prices appears to be cooling a bit. Black Knight says annual appreciation was down in May for the second straight month. But has the damage already been done? The company, in its May Mortgage Monitor , notes that annual price growth retreated from 20.4 percent in April to 19.3 percent in May. That was the largest negative correction in a single month since 2006. That still left prices up 1.5 percent from April to May – nearly twice the average historic acceleration for that month – and a gain of 10.8 percent during the first five months of the year. Black Knight says home price growth is typically 3 to 4 percent over an entire year. The slowdown is nearly universal. Only three of the 100 largest markets, Miami, Omaha, and Grand Rapids, have not braked a bit over the last six months. Price gains in Austin and Boise have decelerated by 12 percentage points, while Stockton (California), Phoenix, and Seattle have dropped back by 5 to 6 points each. Still, the appreciation in many areas remains mind bending. Three metros, Tampa, Raleigh, Nashville, and Miami are still seeing annual gains in excess of 30 percent and another six, all in the Sun Belt, have rates exceeding 27 percent. According to Black Knight Data & Analytics President Ben Graboske, “…while any talk of home values and 2006 might set off alarm bells for some, the truth is that price gains would need to see deceleration at this rate for more than 12 months just to get us back to a ‘normal’ 3-5% annual growth rate. That said, the pace of deceleration could very well increase in the coming months, as we’ve already begun to see in select markets such as Austin, Boise and Phoenix.”
Source: Mortgage News Daily