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February 2023 Mortgage Monitor

February Home Prices See First Monthly Rise After Seven Straight Declines as Sales Pick Up on Lower Rates While Inventory Shrinks Even Further

  • Home prices rose in February on both non-adjusted and seasonally adjusted bases, driven by a combination of modestly easing affordability in January and early February along with worsening inventory levels
  • Sales were up in the month on interest rate dips according to Collateral Analytics data from ICE, but remained 18% below 2019 pre-pandemic averages as affordability pressures continue to weigh on demand
  • Inventory levels continued to deteriorate, with the seasonally adjusted number of homes available for sale falling for the fifth consecutive month to their lowest level since May of last year
  • Adjusted for seasonality, prices were up 0.16% in February – the strongest single-month gain since May 2022 – while at the same time, at 1.94%, annual home price growth fell below 2% for the first time since 2012
  • The national annual growth rate is expected to fall below 0% by April, but this could be a temporary milestone should inventory challenges persist and interest rates ease
  • Home prices are now -2.6% off their 2022 seasonally adjusted peak nationally, a marginal strengthening from -2.7% in January
  • More noteworthy, 39 of the 50 largest U.S. markets saw home prices rise on an adjusted basis in February; that’s in sharp contrast to this past November, when prices were falling in 48 of 50 markets
  • February’s price strengthening also helped shore up homeowner tappable equity levels, which are now $1.6T off peak (-15%); collectively, homeowners with mortgages still have $9.3T in tappable equity available
  • Though down from $210K early last year, the average mortgage holder still has $178K in tappable equity to borrow against while retaining a healthy 20% equity stake in the home

JACKSONVILLE, Fla. – April 3, 2023 – Today, the Data & Analytics division of ICE released its latest Mortgage Monitor Report, based on the company’s industry-leading mortgage, real estate and public records data sets. After seeing home prices pull back for seven consecutive months at the national level, and likely spurred by homebuyers reacting to a dip in 30-year interest rates, the ICE Home Price Index showed something of a rebound occurring in many areas of the country in February. As Vice President of Enterprise Research Andy Walden explains, a widespread shift occurred at the geographic level, with prices rising for the month in 78% of the 50 largest U.S. markets.

“February’s national increase in home prices – up 0.16%, adjusted for seasonality – marked the first positive monthly growth we’ve seen in 8 months,” said Walden. “Daily transaction info from ICE Collateral Analytics and our Optimal Blue rate lock data show that the purchase market increased when rates declined in the early part of the month and borrowers were quick to take advantage of limited inventory. In many areas of the country, that dynamic – low inventory and a modest rise in demand – led to an uptick in home prices. All in, 39 of the 50 largest U.S. markets saw prices increase in February – in sharp contrast to just three months earlier, when 48 of those 50 were experiencing price declines. While some price increases – most notably in Miami, which saw the largest of the month – can be chalked up to people moving to the area, we’re seeing stronger price gains more generally in those areas with better affordability and larger inventory deficits. Still, the backward-looking national annual home price growth rate continued its descent, falling to 1.94% – the first time we’ve seen it under 2% since 2012. While that national number is still on track to fall below 0% in April, if inventory challenges and easing interest rates persist, they may well push it back into positive territory later this year.

“The unfortunate reality is that the scarce supply of inventory that’s the source of so much market gridlock isn’t getting any better. In fact, seasonally adjusted inventory levels continued to deteriorate in February, marking not only the fifth straight month of such declines, but also the largest inventory deficit we’ve seen since May of last year, with more than 90% of markets seeing such deficits grow in February. New listings – already trending well below pre-pandemic levels for months – ran 27% below those levels in February as potential home sellers continued to shy away from the market. All in, total active for-sale inventory is back to 47% below pre-pandemic levels after having recovered to within 38% of normal levels late last year. Without a significant shift in interest rates, home prices or household income, this is a self-fulfilling dynamic that is quite likely to continue for some time.”

This month’s report also surveys the equity landscape to find that February’s price gains have also helped to shore up what had been falling homeowner equity levels. At $14.6T, overall total equity for mortgage holders is now down $2.0T (-12%) from its 2022 peak. Tappable equity – the amount available for withdrawal while maintaining a 20% equity stake in the property – was down $1.6T (-15%). Even so, tappable equity was at $9.3T as of February month-end, which is still up 56% (+3.4T) over the past three years. The average mortgage holder has $178K in tappable equity, down from more than $210K early last year, but still $61K (54%) above the market average three years ago. The total current combined loan-to-value (CLTV) ratio for the mortgage market now sits at 46.8%, noticeably higher than the record low of just under 43% early last year, but historically still very low, and below any level prior to 2021.

Much more information on these and other topics can be found in this month’s Mortgage Monitor.

About Mortgage Monitor

The Data & Analytics division of Black Knight manages the nation’s leading repository of loan-level residential mortgage data and performance information covering the majority of the overall market, including tens of millions of loans across the spectrum of credit products and more than 160 million historical records. The combined insight of the Black Knight HPI and Collateral Analytics’ home price and real estate data provides one of the most complete, accurate and timely measures of home prices available, covering 95% of U.S. residential properties down to the ZIP-code level. In addition, the company maintains one of the most robust public property records databases available, covering 99.9% of the U.S. population and households from more than 3,100 counties.

Black Knight’s research experts carefully analyze this data to produce a summary supplemented by dozens of charts and graphs that reflect trend and point-in-time observations for the monthly Mortgage Monitor Report. To review the full report, visit: https://www.blackknightinc.com/data-reports/

About Black Knight

Black Knight, Inc. (NYSE:BKI) is an award-winning software, data and analytics company that drives innovation in the mortgage lending and servicing and real estate industries, as well as the capital and secondary markets. Businesses leverage our robust, integrated solutions across the entire homeownership life cycle to help retain existing customers, gain new customers, mitigate risk and operate more effectively.

Our clients rely on our proven, comprehensive, scalable products and our unwavering commitment to delivering superior client support to achieve their strategic goals and better serving their customers. For more information on Black Knight, please visit www.blackknightinc.com.

About Mortgage Monitor

ICE manages the nation’s leading repository of loan-level residential mortgage data and performance information covering the majority of the overall market, including tens of millions of loans across the spectrum of credit products and more than 160 million historical records. The combined insight of the ICE Home Price Index and ICE Valuation Analytics’ home price and real estate data provides one of the most complete, accurate and timely measures of home prices available, covering 95% of U.S. residential properties down to the ZIP-code level. In addition, the company maintains one of the most robust public property records databases available, covering 99.9% of the U.S. population and households from more than 3,100 counties.

ICE’s research experts carefully analyze this data to produce a summary supplemented by dozens of charts and graphs that reflect trend and point-in-time observations for the monthly Mortgage Monitor Report. To review the full report, visit: https://www.icemortgagetechnology.com/resources/data-reports

About Intercontinental Exchange

Intercontinental Exchange, Inc. (NYSE: ICE) is a Fortune 500 company that designs, builds and operates digital networks that connect people to opportunity. We provide financial technology and data services across major asset classes helping our customers access mission-critical workflow tools that increase transparency and efficiency. ICE’s futures, equity, and options exchanges – including the New York Stock Exchange – and clearing houses help people invest, raise capital and manage risk. We offer some of the world’s largest markets to trade and clear energy and environmental products. Our fixed income, data services and execution capabilities provide information, analytics and platforms that help our customers streamline processes and capitalize on opportunities. At ICE Mortgage Technology, we are transforming U.S. housing finance, from initial consumer engagement through loan production, closing, registration and the long-term servicing relationship. Together, ICE transforms, streamlines and automates industries to connect our customers to opportunity.

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Media Contacts

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