ICE Mortgage Monitor: Home Prices Cool For Second Straight Month

The latest ICE Home Price Index data shows annual home price gains continued to cool in April, marking the second consecutive month of pullbacks. Gains of +6.1% year over year in February slowed to a revised +5.7% in March before easing to +5.1% as of April. As ICE’s Vice President of Enterprise Research Strategy Andy Walden explains, the cooling is apparent from both seasonally adjusted and unadjusted perspectives. 

Intercontinental Exchange, Inc. (NYSE:ICE), a global provider of technology and data, released its June 2024 ICE Mortgage Monitor Report, based on the company’s mortgage, real estate and public records data sets. “With 30-year rates easing and affordability improving entering the year, unadjusted monthly price gains had been running above their same-month 25-year average since the start of 2024,” said Walden. “However, softening price growth in April has dropped us below that long-run average. We’ve seen the rate of appreciation slow on an adjusted level as well, with April’s +0.28% increase in home prices a marked downshift from +0.45% in March. That’s equivalent to a +3.4% seasonally adjusted annual rate, suggesting annual growth will likely continue to slow in coming months.” 

As noted in the Mortgage Monitor report, if adjusted monthly gains were to continue at their current pace of +0.28% per month, the annual growth rate metric would fall below 4.25% in June, with home prices seeing year-over-year gains of less than 4% by July. However, as Walden pointed out, both supply and demand remain constrained in the housing market, and interest rate movements in either direction can impact prices.  

“While we’ve made meaningful strides in terms of inventory improvement, there are still roughly 36% fewer listings than normal for this time of year. Likewise, in the face of higher rates as well as prices, purchase mortgage demand remains about 45% off comparable periods in 2018 and 2019. As we’ve seen in recent years, any substantial move in rates can result in those supply/demand dynamics shifting quickly, either bolstering or softening home prices.”   

The report details broad improvement in the number of homes for sale nationwide, with inventory up 30% year over year in April to its highest seasonally adjusted level since mid-2020. Nearly 90% of U.S. markets have stronger inventory levels than at this time last year, with inventory in 14 of the largest markets having returned to prepandemic levels. Of those, 13 are in Florida and Texas. Improvement has been more limited – with inventory deficits even worsening in some cases – in many northeastern and midwestern markets, putting continued upward pressure on home prices in these areas.  

“Inventory seems to be the primary differentiator when it comes to the bifurcation we’re seeing in housing market temperatures across the country,” Walden added. “Generally speaking, the Northeast and Midwest still face deep deficits in available homes for sale, helping prices continue to run hot. On the other end of the spectrum, prices are softening in Florida and Texas as for-sale inventories rise in both states. Then you’ve got California, where affordability and inventory are in a steel cage match to determine dominance. In April, each of the state’s top 10 markets either registered below-average growth or clocked adjusted price declines.” 

Of the seven major U.S. markets among the top 50 by population where inventory has returned to – or exceeded – pre-pandemic levels, five saw seasonally adjusted prices edge lower in April. Meanwhile, Houston, Jacksonville, Nashville, and Salt Lake City – all nearing pre-pandemic inventory levels – also saw adjusted prices ease in April.