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The Home Price Index published by Black Knight Inc. (NYSE:BKI) reached a new record peak in May, with 27 of the 50 major markets tracked by the company either reaching new highs or returning to prior home price peaks.

May’s 0.7% seasonally adjusted monthly increase equates to an annualized growth rate of 8.9%, according to Black Knight, which noted this was the fifth consecutive month of gains. However, Black Knight also noted these gains come at the expense of homeownership affordability –as of June 22, with 30-year rates at 6.67%, the principal and interest (P&I) payment needed to buy the median-priced home rose to $2,258, marking the highest payment on record.

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“There is no doubt that the housing market has reignited from a home price perspective,” said Black Knight Vice President of Enterprise Research Andy Walden. “Firming prices have now fully erased the pullback we tracked through the last half of 2022 and lifted the seasonally adjusted Black Knight HPI to a new record high in May.”

Walden added, “Active listings have deteriorated in 95% of major markets so far this year and, overall, we’re still down more than 50% from pre-pandemic levels. New construction starts and completions were both strong in May, which is welcome news. However, most projects underway in the month were five-plus multifamily units, as opposed to single-family residential (SFR) units. SFRs made up just 40% of the total and is now at construction levels still approximately -30% below the 2005 peak. As it stands, housing affordability remains dangerously close to the 37-year lows reached late last year, despite the Federal Reserve’s attempts to cool the market.”

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