ICE Mortgage Monitor: Rate drops make August most affordable month since February, as home price growth cools to 12-month low
ICE's September 2024 Mortgage Monitor Report reveals improved home affordability in August due to declining mortgage rates, making it the most affordable month since February. The principal and interest payment on the average-priced home is now $145 less per month than three months ago. However, affordability remains challenging, with the share of income needed for payments (34.3%) still 10 percentage points above the 30-year average.
The report also notes a cooling in home price growth, with the annual rate slipping to 3.6% in July, the slowest pace in 12 months. While national prices rose slightly, Florida's nine largest metros saw declines. Purchase loan demand increased but remains below levels seen earlier in the year. The market situation is described as positive from the Federal Reserve's perspective, with slower home price growth aiding the fight against inflation.
Il Rapporto Mortgage Monitor di ICE di settembre 2024 rivela un miglioramento dell'affordability delle case ad agosto grazie al calo dei tassi ipotecari, rendendolo il mese più accessibile dal febbraio scorso. Il pagamento principale e degli interessi per una casa dal prezzo medio è ora $145 in meno al mese rispetto a tre mesi fa. Tuttavia, l'affordability rimane una sfida, con la quota di reddito necessaria per i pagamenti (34,3%) che è ancora 10 punti percentuali sopra la media trentennale.
Il rapporto segnala anche un raffreddamento nella crescita dei prezzi delle case, con il tasso annuale che scivola al 3,6% di luglio, il ritmo più lento degli ultimi 12 mesi. Anche se i prezzi nazionali sono aumentati leggermente, i nove maggiori mercati della Florida hanno registrato dei cali. La domanda di prestiti per acquisto è aumentata ma rimane al di sotto dei livelli visti all'inizio dell'anno. La situazione di mercato è descritta come positiva dalla prospettiva della Federal Reserve, con una crescita più lenta dei prezzi delle case che aiuta nella lotta contro l'inflazione.
El Informe Mortgage Monitor de ICE de septiembre de 2024 revela una mejora en la asequibilidad de la vivienda en agosto debido a la caída de las tasas hipotecarias, convirtiéndolo en el mes más asequible desde febrero. El pago principal e intereses de la vivienda de precio medio es ahora $145 menos al mes que hace tres meses. Sin embargo, la asequibilidad sigue siendo un desafío, ya que la proporción de ingresos necesaria para los pagos (34.3%) sigue estando 10 puntos porcentuales por encima de la media de 30 años.
El informe también señala un enfriamiento en el crecimiento de los precios de la vivienda, con la tasa anual cayendo a 3.6% en julio, el ritmo más lento en 12 meses. Aunque los precios nacionales aumentaron ligeramente, las nueve principales áreas metropolitanas de Florida vieron caídas. La demanda de préstamos para la compra ha aumentado, pero sigue por debajo de los niveles vistos a principios de año. La situación del mercado se describe como positiva desde la perspectiva de la Reserva Federal, con un crecimiento más lento de los precios de la vivienda que ayuda en la lucha contra la inflación.
ICE의 2024년 9월 주택 담보 대출 모니터 보고서는 주택 구매 가능성 개선을 보여주며, 이는 모기지 금리가 하락하여 2월 이후 가장 저렴한 달이 되었다고 밝힙니다. 평균 가격의 주택에 대한 원금과 이자 지급액이 현재 3개월 전보다 월 $145 적다고 합니다. 그러나 여전히 주택 구매 가능성이 어려워, 지불에 필요한 소득 비율(34.3%)이 30년 평균보다 10% 포인트 높다고 합니다.
보고서는 또한 주택 가격 상승 둔화를 지적하며, 연간 성장률이 7월 3.6%로 떨어졌다며, 이는 12개월 중 가장 느린 속도입니다. 전국적으로 가격이 조금 올랐지만 플로리다의 아홉 개 주요 대도시는 하락세를 보였습니다. 구매 대출 수요는 증가했지만 여전히 올해 초의 수준보다 낮습니다. 연방준비제도의 관점에서 시장 상황은 긍정적으로 설명되며, 느린 주택 가격 증가가 인플레이션과의 전투에 도움이 됩니다.
Le Rapport Mortgage Monitor d'ICE de septembre 2024 révèle une amélioration de l'accessibilité des logements en août grâce à la baisse des taux hypothécaires, ce qui en fait le mois le plus abordable depuis février. Le paiement principal et les intérêts sur une maison de prix moyen sont désormais 145 $ de moins par mois qu'il y a trois mois. Cependant, l'accessibilité reste un défi, avec la part du revenu nécessaire pour les paiements (34,3 %) qui est toujours 10 points de pourcentage au-dessus de la moyenne de 30 ans.
Le rapport note également un ralentissement de la croissance des prix de l'immobilier, avec le taux annuel tombant à 3,6 % en juillet, le rythme le plus lent en 12 mois. Bien que les prix nationaux aient légèrement augmenté, les neuf plus grandes métropoles de Floride ont enregistré des baisses. La demande de prêts à l'achat a augmenté, mais reste inférieure aux niveaux observés plus tôt dans l'année. La situation du marché est décrite comme positive du point de vue de la Réserve fédérale, la croissance plus lente des prix de l'immobilier contribuant à la lutte contre l'inflation.
Der Mortgage Monitor-Bericht von ICE für September 2024 zeigt eine Verbesserung der Wohnraum-Affordable im August, die auf sinkende Hypothekenzinsen zurückzuführen ist, was es zu dem erschwinglichsten Monat seit Februar macht. Die Haupt- und Zinszahlungen für ein durchschnittlich teures Haus betragen jetzt $145 weniger pro Monat als vor drei Monaten. Dennoch bleibt die Erschwinglichkeit eine Herausforderung, da der Anteil des Einkommens, der für Zahlungen benötigt wird (34,3%), immer noch 10 Prozentpunkte über dem 30-Jahres-Durchschnitt liegt.
Der Bericht weist auch auf ein Abkühlen des Wachstums der Immobilienpreise hin, wobei die jährliche Rate im Juli auf 3,6% sinkt, was das langsamste Tempo in 12 Monaten ist. Während die nationalen Preise leicht gestiegen sind, verzeichneten die neun größten Metropolregionen Floridas Rückgänge. Die Nachfrage nach Kaufkrediten stieg, bleibt jedoch unter den zu Beginn des Jahres gesehenen Niveaus. Die Marktsituation wird aus der Sicht der Federal Reserve als positiv beschrieben, da das langsame Wachstum der Immobilienpreise im Kampf gegen die Inflation hilft.
- Improved home affordability in August due to declining mortgage rates
- Principal and interest payment on average-priced home decreased by $145 per month
- Annual home price growth rate slowed to 3.6% in July, aiding inflation control
- Purchase loan demand increased in response to rate drops
- Share of income needed for home payments (34.3%) still 10 percentage points above 30-year average
- Record high down payments and credit scores for recent purchase mortgages
- Home prices in Florida's largest metros declined
- Purchase mortgage demand remains below levels seen earlier in the year
Insights
The latest ICE Mortgage Monitor report reveals significant shifts in the housing market. Mortgage rates have decreased by 60 basis points since May, improving affordability. This has led to a
The annual home price growth rate has slowed to
While purchase loan demand has shown some improvement, it remains below levels seen earlier this year at comparable rates. This muted response could align with the Fed's goal of lowering rates without overheating the market, potentially supporting a soft landing for the economy.
The housing market is showing signs of a complex rebalancing act. While affordability has improved to its best level since February, it's important to note that it's still significantly strained compared to historical norms. The 10 percentage point increase in income share required for home payments above the 30-year average is a clear indicator of persistent affordability challenges.
Regional disparities are becoming more pronounced. Florida's markets are experiencing price corrections, with Cape Coral seeing a 1% monthly decline. Conversely, Midwest and Northeast markets continue to see price increases due to inventory shortages. This divergence suggests a potential shift in investment opportunities and migration patterns.
The widening spread between single-family and condo prices (3.7% vs 2.3% year-over-year growth) indicates changing consumer preferences or investment strategies. Investors should closely monitor these trends for potential market opportunities or risks in different property types and regions.
The current housing market dynamics present a delicate balance for economic policymakers, particularly the Federal Reserve. The cooling of home price growth to a 12-month low of
The muted response in purchase demand to lower rates, compared to similar rate environments in the past, suggests a potential 'soft landing' scenario. This could allow for continued monetary policy easing without reigniting inflationary pressures in the housing sector.
A key concern is the supply-side constraint, with inventory gains primarily driven by weak demand rather than increased listings. This makes the market sensitive to rate changes and could lead to rapid price increases if demand surges. Policymakers may need to consider measures to incentivize new housing supply to create a more balanced and stable market in the long term.
- Declining mortgage rates have brought home affordability to its best level since February and boosted refinance incentive for many recent-vintage mortgages
- With 30-year conforming rates down 60 bps from just over
- The share of income needed to make payments on that home (
- Spurred by rate declines, purchase loan demand had two of its best weeks since March, but remains noticeably below the levels seen earlier this year and in 2023 when rates were at comparable levels
- The ICE Home Price Index for July showed the annual rate of home price growth slipping to +
- While prices were up +
- In the Midwest and Northeast, inventory shortages persist, and prices continued to push higher in July
August’s mortgage interest rate declines have brought home affordability to its best point in six months. And while purchase mortgage demand has seen a couple of its best weeks since mid-March in response, the rise was muted in comparison to early 2023 and 2024 when rates fell to similar levels. As Andy Walden, ICE Vice President of Research and Analysis, explains, that may actually be good news for the Fed’s goal of lowering rates without overheating the market.
“Recent easing in mortgage rates brought some much-sought relief to prospective homebuyers,” said Walden. “Along with a general cooling in home price growth, rates falling below
Three of the nation’s 100 largest markets are back to their own long-run average affordability levels (
“Even as affordability challenges persist,” Walden continued, “purchase demand perked up on August’s rate drops, hinting at a population of prospective homebuyers poised and ready to act as soon as market movements tip the affordability math in their favor. August’s demand remains muted from earlier this year and last, when interest rates were at comparable levels, but that may well turn out to be a good thing on balance.”
Growing inventory and continuing soft demand led home prices to cool further in July, bringing the annual growth rate down to +
“The market today is in a good position from the perspective of the Fed and its mission,” Walden added. “Slower home growth is a positive sign in the Fed’s fight against inflation and increased – but still mild – demand is good for the market and Fed alike. And of course, in some slightly good news for homebuyers, affordability has improved measurably from recent historic peaks.
“However, recent inventory gains come much more from softer demand than from an increased willingness among homeowners to list their homes for sale. This makes supply – and its follow-on effect on home prices – sensitive to rate changes, making demand worth watching closely. Without a meaningful return in new listing volumes, the market is reliant on weak demand to allow inventory to grow, limiting the prospect of stronger sales activity without a corresponding risk of inventory drawdowns.”
Rising inventory levels are resulting in softer home prices across the state of
“Florida is not alone,” Walden added. “Other areas where inventory has returned to or exceeded pre-pandemic norms also saw prices edge lower in July. Places like
Much more information on these 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 a 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
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
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FAQ
How did mortgage rates affect home affordability in August 2024 according to ICE's report?
What was the annual home price growth rate in July 2024 as reported by ICE?
How did home prices in Florida change in July 2024 according to ICE's report?
What impact did the rate drops have on purchase loan demand in August 2024?
