February 2023 Mortgage Monitor

JACKSONVILLE, Fla. – April 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. After seeing home prices pull back for seven consecutive months at the national level, and likely spurred by homebuyers reacting to a dip in 30-year interest rates, the ICE Home Price Index showed something of a rebound occurring in many areas of the country in February. As Vice President of Enterprise Research Andy Walden explains, a widespread shift occurred at the geographic level, with prices rising for the month in 78% of the 50 largest U.S. markets.

“February’s national increase in home prices – up 0.16%, adjusted for seasonality – marked the first positive monthly growth we’ve seen in 8 months,” said Walden. “Daily transaction info from ICE Collateral Analytics and our Optimal Blue rate lock data show that the purchase market increased when rates declined in the early part of the month and borrowers were quick to take advantage of limited inventory. In many areas of the country, that dynamic – low inventory and a modest rise in demand – led to an uptick in home prices. All in, 39 of the 50 largest U.S. markets saw prices increase in February – in sharp contrast to just three months earlier, when 48 of those 50 were experiencing price declines. While some price increases – most notably in Miami, which saw the largest of the month – can be chalked up to people moving to the area, we’re seeing stronger price gains more generally in those areas with better affordability and larger inventory deficits. Still, the backward-looking national annual home price growth rate continued its descent, falling to 1.94% – the first time we’ve seen it under 2% since 2012. While that national number is still on track to fall below 0% in April, if inventory challenges and easing interest rates persist, they may well push it back into positive territory later this year.

“The unfortunate reality is that the scarce supply of inventory that’s the source of so much market gridlock isn’t getting any better. In fact, seasonally adjusted inventory levels continued to deteriorate in February, marking not only the fifth straight month of such declines, but also the largest inventory deficit we’ve seen since May of last year, with more than 90% of markets seeing such deficits grow in February. New listings – already trending well below pre-pandemic levels for months – ran 27% below those levels in February as potential home sellers continued to shy away from the market. All in, total active for-sale inventory is back to 47% below pre-pandemic levels after having recovered to within 38% of normal levels late last year. Without a significant shift in interest rates, home prices or household income, this is a self-fulfilling dynamic that is quite likely to continue for some time.”

This month’s report also surveys the equity landscape to find that February’s price gains have also helped to shore up what had been falling homeowner equity levels. At $14.6T, overall total equity for mortgage holders is now down $2.0T (-12%) from its 2022 peak. Tappable equity – the amount available for withdrawal while maintaining a 20% equity stake in the property – was down $1.6T (-15%). Even so, tappable equity was at $9.3T as of February month-end, which is still up 56% (+3.4T) over the past three years. The average mortgage holder has $178K in tappable equity, down from more than $210K early last year, but still $61K (54%) above the market average three years ago. The total current combined loan-to-value (CLTV) ratio for the mortgage market now sits at 46.8%, noticeably higher than the record low of just under 43% early last year, but historically still very low, and below any level prior to 2021.

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 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