ICE Mortgage Monitor: “Lowest calendar year home price growth of any year since 2011”

Here is the ICE December Mortgage Monitor report (pdf).

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

• 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

  …

  “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.

  emphasis added

Mortgage Delinquencies Increased in December

Here is a graph on delinquencies by severity from ICE. Overall delinquencies increased in December are still below the pre-pandemic levels. Source: ICE McDash

• While the share of homeowners past due on mortgage payments trended modestly higher in the second half of 2024, performance remains strong by historical standards

• The national delinquency rate rose 14 basis points (bps) in 2024 but remained 22 bps below its pandemic entry point

• Performance remains strong among GSE and portfolio-held mortgages, with delinquencies among portfolio held mortgages down 11 bps from last year and 1.1 percentage points below where we entered 2020

• FHA delinquencies, on the other hand, have increased sharply, rising 74 bps in 2024, and are now 2.5 percentage points above where they were just prior to the global pandemic

• VA delinquencies have also been on the rise, up 80 bps in 2024 and 83 bps from the beginning of 2020

• With FHA and VA loan delinquencies likely to serve as canaries in the coal mine for mortgage performance in this cycle, we expect this to become a growing topic of conversation in 2025

Deficit of homes listed for sale

When mortgage rates declined in September and October, there was a surge in refinance activity, especially in rate/term refinances by homeowners with mortgage rates in the 7%+ range.

• Nationally, the number of homes listed for sale grew by 22% throughout 2024, with the deficit relative to pre-pandemic levels falling from -36% to -22%, leaving for-sale inventory at its strongest level since mid-2020

• At the current rate of improvement, the market (nationally) would be on pace to return to pre-pandemic for-sale inventory levels by mid-2026, although a number of macro and micro economic factors could change that trajectory

• Inventory improvements flattened in December, which is worth watching as we make our way into early 2025 and the spring buying season

• Inventory levels rose in 95% of major markets, with the strongest increases in the South and Southeast and more modest improvements in the Midwest, Northeast, and specifically in San Jose out West

• 25% of major markets – primarily in the South and Southeast – have seen the number of homes listed for sale return to pre-pandemic levels, with approximately 15% more on pace to ‘normalize’ in 2025

• The Midwest and Northeast are noticeable outliers, with much deeper deficits remaining and slower rates of improvement, as most markets in those regions are not on pace to 'normalize' until 2027 or beyond

“Lowest calendar year home price growth of any year since 2011”

Here is the year-over-year in house prices according to the ICE Home Price Index (HPI). The ICE HPI is a repeat sales index. ICE reports the median price change of the repeat sales. The index was up 3.4% year-over-year in December.

Source: ICE Home Price Index (HPI)

• Annual home price growth edged slightly higher in December, closing out the year at +3.4%

• That marks the lowest calendar year home price growth of any year since 2011 when the housing market was nearing its trough following the Great Financial Crisis

• In fact, 2024’s growth was a full percentage point below the +4.4% growth seen in both 2014 and 2018, which were previously the lowest growth years in the past decade

• The modest uptick in December’s annual home price growth rate was a result of softer price gains in late 2023 rolling out of the backward-looking 12-month window, rather than a strengthening of prices in December

• On a seasonally adjusted basis, prices rose by 0.2% in the month, roughly equivalent November, and slightly below October, following the brief dip in 30-year rates to near 6% in the lead-up to the Fed’s 50 bps rate cut in September

• If current seasonally adjusted monthly gains persist, the annual home price growth rate is poised to begin cooling again in the early months of 2025

There is much more in the mortgage monitor including an extensive analysis of the financial impact of the California wildfires.