Tappable equity in Q1 sees largest quarterly growth on record

“Home price growth cooled – albeit very slightly – in April,” Graboske said. “While a downward shift from 20.4% to 19.9% annual growth is hardly cause for concern, it’s also likely we’ve not yet seen the full impact of recent rate increases. Rather, April’s decline is more likely a sign of deceleration caused by the modest rate increases in late 2021 and early 2022 when rates first began ticking upwards.”

Although the March and April rate spikes will take time to show up in repeat sales indexes, the current home prices and interest rates have already made for the worst affordability since July 2006.

The drastic price growth has also resulted in the monthly principal and interest (P&I) payment on the average-priced home, with 20% down, to rise 44% to $600 more than it was at the start of the year and 79% to $865 more than before the pandemic.

“There’s another side to this story, though, one of significant equity growth among current homeowners. With the average-priced home up 42% in value since the start of the pandemic, current homeowners with mortgages are sitting on an average $207,000 in equity that they could choose to tap while still keeping a 20% equity buffer in place,” Graboske said. “It really is a bifurcated landscape – one that grows ever more challenging for those looking to purchase a home but is simultaneously a boon for those who already own [one]. Depending upon where you stand, this could be the best or worst of all possible markets.”