ICE Mortgage Monitor: Home Prices Cool for Second Straight Month in April

(Illustration courtesy of ICE)

Intercontinental Exchange reported its ICE Home Price Index showed cooling annual growth for the second consecutive month in April, falling to 5.1% from a revised 5.7% in March and 6.1% in February.

ICE Vice President of Enterprise Research Strategy Andy Walden said the cooling is apparent from both seasonally adjusted and unadjusted perspectives.

“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,” Walden said. “However, softening price growth in April has dropped us below that long-run average.”

Walden noted the rate of appreciation has slowed 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,” he said.

The June 2024 ICE Mortgage Monitor Report said if adjusted monthly gains continue at their current pace, 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,” Walden said. “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.”