There was a notable cooling in the growth of home prices in March, according to the latest ICE Home Price Index (HPI), produced by the Intercontinental Exchange.
Data shows that annual home price growth has decelerated to 2.2 percent heading into the spring home buying season.
“Analysis of ICE HPI data shows a broad-based cooling of home prices, with 90 percent of U.S. markets experiencing slower home price growth compared to three months ago,” Andy Walden, head of mortgage and housing market research for ICE, said. “This trend is being driven by improved inventory levels, which are up 27 percent over last year, and stabilized mortgage rates, which dipped below 6.6% in early March and have been holding in the 6.6 percent – 6.7 percent range.”
Among the key findings:
• Annual home price growth slowed to +2.7% in February, with early data for March showing further cooling to +2.2%.
• Condo prices decreased annually for the first time in more than a decade with condo prices lagging single family price growth in 97 of the 100 largest U.S. markets.
• Florida condo prices dropped the most. Back-to-back hurricanes, combined with rising property insurance costs, insurability challenges, slowing migration and new construction have all lowered home prices in most major Florida markets.
• A surge in multifamily completions has created price pressure across the country, especially in metro regions such as Little Rock, Austin, and Denver.
“Early March data shows condo prices dropping for the first time in more than a decade, with the largest impacts in the Sunbelt, most notably in Florida,” Walden said. “While falling condo prices can erode equity levels among existing condo owners, they also afford modest relief to those looking to prospective home buyers. In fact, 95 percent of U.S. markets have experienced at least slight improvements in affordability compared to a year ago.”