Has The Real Estate Pullback Started? Home Price Growth Sees Biggest Single-Month Slowdown Since 1970s

The analytics team at technology data provider Black Knight, Inc BKI released its latest Mortgage Monitor Report, which gives insights into home prices and real estate data.

According to the most recent report, yearly home price growth slowed down by about two percentage points in June, the biggest monthly decrease since at least the early 1970s, here’s what you need to know.

Ben Graboske, president of Black Knight Data & Analytics, said June's slowdown in annual home price growth from 19.3% to 17.3% coincided with the biggest monthly increase in properties for sale in the previous 12 years.

“The pullback in home price growth in June marked the strongest single month of slowing on record dating back to at least the early 1970s – and it wasn’t even close,” said Graboske. “According to the Black Knight HPI, the annual rate of appreciation dropped nearly two full points in June.”

The biggest monthly slowdown during the economic downturn in 2006 was 1.19%; nevertheless, June outperformed that by 66%.

Graboske mentioned the slowdown was not focused on one market, rather it was broad-based. “In fact, 25% of major U.S. markets saw growth slow by three percentage points in June, with four decelerating by four or more points in that month alone,” he said.

Black Knight’s data shows a seasonally adjusted 22% increase in the number of homes listed for sale over the past two months, while inventory remains 54% below 2017-2019 levels.

Also Read: Chinese Investors Buy $6.1 Billion Worth Of US Homes In Past 12 Months

“Even with our Collateral Analytics data showing a seasonally adjusted 22% increase in the number of homes listed — with a national shortage of more than 700,000 listings, it would take more than a year of such record increases for inventory levels to fully normalize,” Graboske opined.

Black Night’s monitor found that the catalyst behind recent inventory increases and the slowdown in sales comes directly from rising interest rates and the lowest levels of home affordability in nearly 40 years.

The average price of a home in the United States is $428,700 — a 30% increase from the 2020 levels of $329,000.