March 2023 Mortgage Monitor

Home Prices Up Again in March on Worsening Inventory Shortages and Modest Rise in Demand

According to the latest ICE HPI, home prices rose in March on both non-adjusted and seasonally adjusted bases, driven by a modest bump in demand and further deterioration in for-sale inventory levels
Sales activity experienced a modest increase for the second consecutive month in March, with seasonally adjusted volumes up 13% from January’s low, but still roughly 13% below their pre-pandemic average
At the same time, Collateral Analytics data from ICE showed the supply of active for-sale listings fell for the sixth straight month, dropping to the lowest level since April of last year
Further, 30% fewer new listings came on the market in March as compared to pre-pandemic norms, with the deficit having increased from 27% below pre-pandemic norms in February and 25% below in January
Home prices were up a seasonally adjusted 0.45% in March (+1.38% non-adjusted) for the third consecutive month of increases, with 92% of markets seeing prices increase in the month
Despite prices hardening this spring, annual home price growth continues to cool; prices were up just 1.0% on an annual basis, a backward-looking metric that has been falling by 1.3-1.4% each month since the start of 2023
While home prices in many western and pandemic boom markets are still well off their peaks, 40% of major markets have seen prices return to peak levels
Of the top 50 markets (by population), only Austin (-0.7%), Salt Lake City (-0.12%) and San Antonio (-0.07%) are still seeing prices falling on an adjusted basis, with Phoenix and Dallas effectively flat month over month

JACKSONVILLE, Fla. – May 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. A modest rise in homebuyer demand led to home prices strengthening for the third consecutive month in March, as both January and February were upwardly revised to show positive movement in prices. As Vice President of Enterprise Research Andy Walden explains, while historical trends would suggest an increase of new listings in the spring, the inventory shortage at the root of this home price strengthening has instead worsened as the country moves further into the traditional homebuying season.

“Home prices rose a seasonally adjusted 0.45% in March at the national level,” said Walden. “A modest bump in homebuyer demand ran headlong into falling for-sale supply, leading to the third consecutive monthly increase in home prices after they’d been pulling back from recent peaks through the tail end of 2022, essentially nationwide. In fact, just five months ago, prices were declining on a seasonally adjusted month-over-month basis in 92% of all major U.S. markets. Fast forward to March, and the situation has done a literal 180, with prices now rising in 92% of markets from February. Despite the home price strengthening of these past couple of months, the backward-looking annual growth rate continued to cool as the influence of the red-hot spring 2022 market fades in the rearview mirror. Prices are now up just 1.0% year over year, with the annual growth rate on track to fall to roughly 0% by April. That said, low inventory levels will limit just how far that metric will fall in coming months.

“The strengthening in home prices is the direct result of a second month of modest increases in sales volumes meeting a continually shrinking for-sale inventory. Our Collateral Analytics data showed the supply of active listings fell for the sixth straight month, to the lowest level since April 2022. On top of that, March saw deterioration in supply among 90% of major markets. New listings aren’t filling the gap either – 30% fewer properties hit the market in March as compared to pre-pandemic norms. That deficit’s now increased in each of the last six months and is up from -27% in February and -25% the month before. Given the modest rise in sales volumes, current available inventory represents just 2.6 months of supply on a seasonally adjusted basis, tipping the scale back toward sellers in a tightly constricted market.”

This month’s report also draws upon daily rate lock data from Optimal Blue, a division of ICE, to help gauge the impact of today’s volatile rate environment on mortgage lending activity. Rates remained volatile through March and April – from a high of 6.85% in early March, to 6.21% by early April, then back up above 6.5% by the middle of the month. More noteworthy in recent weeks is the pullback in purchase rate lock volumes despite overall lower mortgage rates than we saw in March. Through April 26, rates have averaged 6.38% for the month, down from the 6.56% average daily rate for the month of March. While rates have eased, and the heart of the traditional home buying season takes hold, purchase rate locks have pulled back in recent weeks, falling 18% (unadjusted) from their late March highs. Likewise, refinance volumes are down 17% among cash-outs and 24% among rate-term refis since mid- to late March. This trend is worth watching closely in coming weeks given the delicate balance of supply and demand in today’s market. Granular, timely data has become ever more essential as the market continues to sift through each new shred of economic news in hopes of predicting how the Federal Reserve and broader economy will react.

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

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.

Trademarks of ICE and/or its affiliates include Intercontinental Exchange, ICE, ICE block design, NYSE and New York Stock Exchange. Information regarding additional trademarks and intellectual property rights of Intercontinental Exchange, Inc. and/or its affiliates is located here. Key Information Documents for certain products covered by the EU Packaged Retail and Insurance-based Investment Products Regulation can be accessed on the relevant exchange website under the heading “Key Information Documents (KIDS).” Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 – Statements in this press release regarding ICE’s business that are not historical facts are “forward-looking statements” that involve risks and uncertainties. For a discussion of additional risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see ICE’s Securities and Exchange Commission (SEC) filings, including, but not limited to, the risk factors in ICE’s Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the SEC on February 2, 2023.

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

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 -- Statements in this press release regarding ICE's business that are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of additional risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see ICE's Securities and Exchange Commission (SEC) filings, including, but not limited to, the risk factors in ICE's Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC on February 8, 2024.

Media Contacts

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