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M REPORT | 53 O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST DATA Home Prices Accelerate at Rate 'Never Seen Before' Today's home values mean more refinancing, equity loans, and other options for homeowners, say researchers. H omeownership is becoming increasingly expensive, serious de- linquencies are elevated but improving, borrowers are still making use of forbearance plans, foreclosures are minuscule, and home-owning households col- lectively have trillions of dollars in tappable home equity. It is all detailed in the monthly Mortgage Monitor from Black Knight's data and analytics team, which exam- ines a variety of issues related to the mortgage finance and housing industries. Home prices have grown to astronomical levels— at almost 18% year over year, May's home price growth dwarfed April's, which was a steep 14.8%, according to the analysts at Black Knight. For the third consecutive month, home price growth in the U.S. hit an all-time-high, the researchers point out. Black Knight's Data and Analytics President Ben Graboske says the growth has been widespread, with appreciation ac- celerating in each of the country's 100 largest metropolitan areas in May, and his team expects prices to continue increasing throughout the year. "Frankly, home values are ap- preciating at rates we've simply never seen before, as low interest rates, ultra-scarce inventory, and increasingly competitive home- buyers combine to create a truly unprecedented market," Graboske said. Not only are prices for house hunting hopefuls increasingly out of reach, but also principal and interest payments are up 18% to $191 a month and, even with rates around 3% the payment-to- income ratio is up. It takes 21.3% of the median household income to make the monthly payment on the average priced home purchase assuming 20% down. May's 1.5% mortgage delinquency increase is only the second since the pandemic recovery began last June and appears to be calendar related and likely temporary, the report showed. "Through the 25th of the month, 91.8% of mortgage holders had made their May payment, the most since the pandemic's onset at that point," the researchers noted. "This suggests delinquencies would have continued a downward trend were it not for the [Memorial] holiday falling at the end of the month." An estimated 7.25 million borrowers have participated in for- bearance programs at one point or another throughout the pandemic, representing 14% of all homeown- ers, Black Knight reports. More than 70% of all participants have since left their plans, while 28% remain in active forbearance. In general, Black Knight (which issues weekly forbearance updates) points out that the forbearance landscape is improving, if slowly. The rate of foreclosure activ- ity is down 2.5% for the month, hitting another record low. That's due to moratoria and forbearance programs. As home prices skyrocket, options for existing homeowners increase. "Obviously, as home values increase, so do levels of avail- able, tappable equity, which hit an all-time high of $8.1 trillion in Q1," Graboske said. "In turn, rising equity levels provide homeowners with more refinance options— switching from an FHA to a GSE loan, for example, to both lower a borrower's interest rate and poten- tially eliminate mortgage insurance payments at the same time." Another stat of note: overall mortgage debt now accounts for less than 48% of associated home values, the lowest leverage rate on record dating back to at least 2005.