ICE Mortgage Monitor: 2024 Saw Softest Home Price Growth of Any Year Since 2011; Mortgage Delinquencies Gradually Trending Higher

Rhea-AI Summary

ICE's February 2025 Mortgage Monitor Report reveals that 2024 experienced the lowest home price growth since 2011, ending at 3.4%. Home inventory increased 22% in 2024, reaching its highest level since mid-2020, with southern states leading the recovery to pre-pandemic levels.

The report highlights significant challenges from natural disasters, particularly the L.A. fires affecting 17,000 homes and condos. Early data shows nearly 5% fewer mortgage holders in fire-affected areas made January payments compared to December. Additionally, over 56,000 homeowners across seven states are still recovering from last year's hurricanes.

Mortgage performance shows a mixed picture: while overall delinquency rates remain 22 basis points below pre-pandemic levels, FHA delinquencies are rising significantly, now 2.5 percentage points above pre-pandemic levels. VA delinquencies also increased by 80 basis points in 2024. Despite these trends, 2024 saw record-low foreclosure rates due to forbearance programs and strong equity positions.

Positive

• Home inventory increased 22% in 2024, reaching best levels since mid-2020
• Overall mortgage delinquency rate remains 22 basis points below pre-pandemic levels
• Record low foreclosure rates in 2024
• Portfolio-held mortgage delinquencies down 11 basis points from previous year

Negative

• Lowest annual home price growth since 2011 at 3.4%
• FHA delinquencies 2.5 percentage points above pre-pandemic levels
• VA delinquencies up 80 basis points in 2024
• 5% decrease in mortgage payments from fire-affected California homeowners

Insights

Housing Market Analyst

The latest ICE Mortgage Monitor report unveils critical shifts in the housing market landscape that warrant careful investor attention. The 3.4% annual home price growth in 2024 - the lowest since 2011 - signals a significant market recalibration, but the story beneath the surface is more nuanced.

The 22% increase in housing inventory represents a pivotal market evolution, with Southern states leading the recovery to pre-pandemic levels. This regional disparity creates a tale of two markets: while Southern states approach normalization, the inventory-starved Midwest and Northeast continue experiencing stronger price appreciation, hosting 18 of the 20 strongest housing markets.

The rising delinquency trends deserve particular scrutiny. While the overall delinquency rate remains 22 basis points below pre-pandemic levels, the divergence between loan types is telling. FHA loans show concerning trends, with delinquencies 2.5 percentage points above pre-pandemic levels, while VA delinquencies rose 80 basis points in 2024. This pattern suggests increasing stress among first-time homebuyers and veterans, potentially signaling broader affordability challenges.

The impact of natural disasters adds another layer of complexity, with early data showing 5% fewer on-time mortgage payments in California's fire-affected zones. This trend could have ripple effects on mortgage-backed securities and municipal bonds, as evidenced by the spread-widening in Los Angeles water and power municipal bonds - a unprecedented market response to natural disasters.

Looking ahead, the futures market's projection of 30-year rates near 6.6% by July 2025 suggests modest relief in financing costs. However, the combination of regional inventory imbalances, rising delinquencies in government-backed loans and increasing natural disaster risks creates a complex environment for real estate investors and mortgage market participants.

Municipal Bond Analyst

The unprecedented spread-widening in Los Angeles water and power municipal bonds marks a watershed moment in municipal debt markets. This marks the first documented instance of natural disasters triggering immediate repricing of municipal debt, potentially establishing a new risk paradigm for muni investors.

The impact extends beyond immediate pricing effects. With 140 municipal entities exposed to ongoing wildfires and 56,000 homeowners still struggling with payments across seven hurricane-affected states, we're witnessing a fundamental shift in how climate risks are priced into municipal bonds. This could lead to more sophisticated risk assessment models and potentially higher risk premiums for bonds in disaster-prone areas.

The situation highlights the growing importance of incorporating climate risk into municipal bond analysis, particularly for utilities and infrastructure-related issuances. Investors should expect similar repricing events to become more common, potentially creating both risks and opportunities in the municipal bond market as climate-related events continue to impact local government revenues and expenditures.

• Annual home price growth edged slightly higher in December to finish the year at +3.4%, the softest growth since 2011, when the market was recovering following the financial crisis
• The number of homes for sale in 2024 increased 22% leaving for-sale inventory at its best level since mid-2020, with a quarter of markets – primarily in southern states – back above pre-pandemic levels
• Climate events are a focal point for the market entering 2025; ICE data shows 17,000 homes and condos were in the path of the L.A. fires, with broad implications for both households and municipalities
• ICE daily mortgage data is already showing the financial stresses facing fire-affected homeowners, with nearly 5% fewer mortgage holders making payments by mid-January when compared to December
• Nationally, mortgage delinquencies have gradually been on the rise over the back half of 2024, especially among FHA and VA loans, suggesting performance will become a growing focal point in 2025

 

ATLANTA & NEW YORK--(BUSINESS WIRE)-- Intercontinental Exchange, Inc. (NYSE:ICE), a leading global provider of technology and data, today released its February 2025 ICE Mortgage Monitor Report, based on the company’s robust mortgage, real estate and public records data sets.

Home prices ended the year on an up note but 2024 was the softest year for home price growth in more than a decade. This month’s Mortgage Monitor analyzes the latest trends shaping the housing market heading into 2025, including a deep dive into the local and broader impacts of the California wildfires, which hit while homeowners in southern states are still recovering from the most recent hurricane season.

“Natural disasters continue to be in the spotlight across the country, and our hearts go out to the tens of thousands of affected households,” said Andy Walden, Head of Mortgage and Housing Market Research for Intercontinental Exchange. “Early data shows financial pressures building among homeowners impacted by the ongoing California wildfires, while at the same time, more than 56K homeowners are still struggling to get back on track with monthly payments across seven states in the wake of last year’s major hurricanes.

“ICE’s McDash Flash daily data suggests that nearly 5% fewer homeowners inside California’s Palisades and Eaton fire zones had made their January mortgage payment by mid-month, when compared with the same time in December,” Walden continued. “Keep in mind those fires broke out after many homeowners had already made their January payments, so we likely won’t see the true stresses those homeowners are facing until February payments become due.”

“We’re also beginning to see potential downstream impacts among a number of the more than 140 municipal entities that were at least partially exposed to the ongoing wildfires, with spread-widening being seen in City of Los Angeles water and power municipal bonds which are typically paid through local water and power revenues. This represents perhaps the first time the bond market has experienced a nearly immediate repricing of municipal debt due to a natural disaster,” said Walden.

Turning to the broader market, ICE’s U.S. Conforming 30-year Fixed Mortgage Rate Lock Weighted APR Index Futures, suggest modest improvement in rates over the spring buying season as of Jan. 21, with 30-year rates now implied to be near 6.6% by July 2025.

Overall, for-sale inventory enters the year as a bright spot for a market that’s been dealing with deep deficits in recent years. Inventory levels grew by 22% in 2024, with a quarter of markets, largely in the southern U.S. now back to or above pre-pandemic levels.

“At the current rate of improvement, another 15% of markets, primarily in the South and West would be on pace to see inventory levels normalize this year,” Walden said. “At the same time, Midwest and Northeast markets continue to face steep deficits and a slower path to recovery. Given the disparity of inventories across the country it is no surprise to see 18 of the 20 strongest housing markets from a price growth perspective located in inventory-starved portions of the Midwest and Northeast.”

From a mortgage performance perspective, the market enters 2025 on a mixed note. Overall, the national mortgage delinquency rate remains 22 basis points (bps) below pre-pandemic levels, but mortgage performance is a tale of two markets. Performance remains strong among GSE and portfolio-held loans, with delinquencies among portfolio-held mortgages down 11 bps from last year and 1.1 percentage points from the beginning of 2020. FHA delinquencies, on the other hand, have been sharply rising, and now sit 2.5 percentage points above pre-pandemic levels. VA delinquencies have also been on the rise, up 80 bps in 2024 and 83 bps from the beginning of 2020.

Despite gradually rising delinquencies in recent months, the total number of foreclosures started and completed (sales) in 2024 hit record lows – outside of the COVID-19 moratoria – due to the prevalence of forbearance and other loss mitigation efforts, along with the strong equity footing of mortgage holders in today’s market. Low foreclosures aside, mortgage performance is likely to be a focal point in 2025.

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

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 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.

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.

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, 2023, as filed with the SEC on February 8, 2024.

Source: Intercontinental Exchange

Category: Mortgage Technology

ICE-CORP

View source version on businesswire.com: https://www.businesswire.com/news/home/20250203883770/en/

ICE Media Contact

Brad Kuhn

brad.kuhn@ice.com

+1 (904) 248-6341

ICE Investor Contact:

Katia Gonzalez

katia.gonzalez@ice.com

+1 (678) 981-3882

Source: Intercontinental Exchange

FAQ

What was ICE's reported home price growth rate for 2024?

According to ICE's Mortgage Monitor Report, home price growth in 2024 finished at 3.4%, marking the softest growth since 2011.

How much did home inventory increase in 2024 according to ICE's report?

Home inventory increased by 22% in 2024, reaching its highest level since mid-2020.

How many homes were affected by the L.A. fires according to ICE's data?

ICE's data shows that 17,000 homes and condos were in the path of the L.A. fires.

What is the current trend in FHA mortgage delinquencies according to ICE?

FHA delinquencies have been sharply rising and are now 2.5 percentage points above pre-pandemic levels.

How did VA loan delinquencies perform in 2024 according to ICE's report?

VA delinquencies increased by 80 basis points in 2024 and are up 83 basis points from the beginning of 2020.