After 2 1/2 years of consistent home price increases, payment-to-income ratios are still below pre-bubble levels nationally and significantly below ratios seen at the peak of the market.

The principal and interest payment on a median-priced home is equal to 21 percent of median gross monthly income nationally, according to Ben Graboske, senior vice president for Black Knight Financial Services.

“In the years before the housing bubble, that ratio was closer to 25-26 percent, and at the height of the market in 2006, it peaked as high as 33 percent,” he added.

Currently, the monthly payment on a median-priced home is $400 less today than it was in 2006.

black-knight-may-2015-mortgages

However, if interest rates rise by 75 basis points a year and home prices appreciate by 3 percent annually, this payment-to-income ratio would stand at 27 percent by 2017.

This ratio would mean that the payment on the median-priced home would increase by $116 per month over the next year and $241 per month by March 2017.

“A 1 percent increase in interest rates would impact affordability as much as a 13 percent jump in home prices,” Graboske said.

Black Knight recently looked into the current population of refinanceable borrowers and found that between traditional and HARP programs, approximately 6.5 million borrowers could qualify for and benefit from refinancing.

For both groups, the potential monthly savings could be substantial.

Roughly 550,000 homeowners could save $500 or more each month by refinancing at today’s rates. More than 3 million could save at least $200 per month.

“We’re looking at about $1.5 billion that American homeowners could be saving every month through a traditional refinance,” he said, cautioning, “If rates go up just half a percentage point, 2.6 million people fall out of that refinanceable population.”

Black Knight also released data related to delinquent loans and foreclosure activity. The firm found that the nation’s loan delinquency rate stood at 4.96 percent entering June.

States with the highest percentage of noncurrent loans include: Mississippi (13 percent), New Jersey (10.86 percent), Louisiana (10.1 percent), New York (9.43 percent) and Maine (9.4 percent).

States with the highest percentage of loans that are more than 90 days delinquent include Mississippi (4.54 percent), Rhode Island (3.38 percent), Louisiana (3.13 percent), Alabama (3.07 percent) and Arkansas (2.76 percent).

Email Erik Pisor.


Inman Connect San Francisco is right around the corner — register now and save $200!

Show Comments Hide Comments

Comments

Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
Success!
Thank you for subscribing to Morning Headlines.
Back to top
We are less than 1 week away from Inman Connect! Get your ticket for $99 before prices go up next week.GET YOUR TICKET×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription