Home prices rose for the ninth consecutive month but signs of a slowdown are showing, according to the latest data from ICE’s Mortgage Monitor Report
- Y-O-Y: Home price growth rose to 4.6% in October, up from 4.2% in September and the highest level since December 2022.
- M-O-M: Home prices were up 0.17% from last month, down from the 0.39% in September and the lowest level since price growth went positive in February.
Overwhelming Majority. Annual home price growth rates rose in more than 80% of major markets in October despite slowing month-over-month price growth.
- Hartford continues to lead all markets with prices up 12.5% year over year, followed by Providence (+10.5%), and Milwaukee (+9.8%).
- On the flip side, Austin, TX is by far the biggest loser with prices down 8.2% from one year ago followed by San Antonio (-2.7%) and New Orleans (-0.4%).
Cash-Outs Hold Steady. An estimated $43 billion in home equity was extracted in Q3, a modest increase from $42B in Q2
- Cash-out refinance withdrawals were up 4% in the quarter to $20 billion but are down 35% from the same time last year.
- Only 0.41% of tappable equity available at the start of the quarter was withdrawn in Q3, roughly on par with what we’ve seen over the previous three quarters, but 55% below the average from 2010-2022
Inventory Rises. The inventory of homes listed for sale improved for a fifth consecutive month in October. However, inventory remains down 42% from pre-pandemic levels, an improvement from -51% in May.
- More than 95% of major markets have seen inventory levels improve in recent months with Lakeland, Fl taking the top spot with inventory now 15% above 2017-2019 averages, surpassing Austin for the largest surplus of homes for sale compared to pre-pandemic levels.
Analysis. Andy Walden, ICE Vice President of Enterprise Research, noted that rising delinquency rates can be deceiving. “…58% of these seriously delinquent mortgage holders hold more than 20% equity stakes in their homes. Strong equity cushions not only provide borrowers incentive to work with their servicers to return to making mortgage payments, they also open up other options, such as salvaging earned equity with a traditional home sale rather than going through foreclosure.”