Following an early-year runup, home price growth eased to start the spring, as inventory also
But despite the leveling off in prices,
Annual housing costs grew 5.1% in April, slowing down from increases of 5.7% and 6.1% the prior two months, according to ICE’s Home Price Index.Â
“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 Andy Walden, ICE Mortgage Technology’s vice president of enterprise research strategy, in a press release.
“However, softening price growth in April has dropped us below that long-run average,” Walden added. That could foreshadow further slowdown in coming months to potentially under 4% by July.Â
Demand picked up to start 2024, as interest rates
“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,” Walden noted.Â
Nationwide inventory grew 30% year-over-year, with 90% of markets reporting greater supply. But the housing market remains far from typical.Â
“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,” according to Walden.
Large variations exist across regions, though. While 14 cities showed inventory returning to or exceeding pre-pandemic levels, 13 were located in Texas and Florida. Every major Florida market had at least 50% more inventory in April compared to the year prior, ICE found.
Both states
Meanwhile, the Northeast and Midwest continue to see an inventory crunch, keeping prices elevated. Rochester, New York, saw the highest rate of home price growth in April of 15.2% on a seasonally adjusted basis. It was followed by Providence, Rhode Island, and Hartford, Connecticut, which recorded gains of 11.6% and 10.8%, respectivelyÂ
Since 2020,
With current interest rates running more than two times higher from levels of three years ago, mortgage originations skew heavily toward the purchase market, with 81% of lending in the first quarter compared to 19% for refinances. But compared to activity in pre-pandemic years of 2018 and 2019, purchase mortgage demand is running approximately 45% lower. Â