00:00 Speaker A
According to the Intercontinental Exchanges, April 2025 mortgage monitor, the rate of home price increases slowed to 2.2% with 95% of markets showing some improvement in affordability from the same year ago, same time a year ago. Joining me now for more on the report and the state of the housing market, we’ve got Andy Walden, Intercontinental Exchange head of mortgage and housing market research. Andy, great to see you once again. What are your biggest takeaways from this report?
00:37 Andy Walden
Yeah, I think it’s not only slowing in overall home price growth, which we’ve seen over the last three months, you’ve started to see some divergence in the condo market that I think is really interesting. In fact, our highest enhanced home price index is showing condo prices marginally down from the same time last year. It’s the first time that we’ve seen that since 2012. And so you’re seeing slower overall home price growth in the vast majority of markets across the country and a little bit of easing in condo prices as well.
01:10 Speaker A
So, condo prices did fall in several markets. What do you make of that trend?
01:17 Andy Walden
Yeah, I think there’s a few different reasons for it. First of all, if you look at the slowing growth overall in the housing market, it has to do with rising inventory levels. You’re seeing them almost universally across the country from the same time last year. When you look at condo prices, I think a couple things stand out. First of all, the condo market typically is a little bit more volatile than single family residences. And so when the market heats up, you see a little bit of overgrowth in that condo space. When the overall housing market starts to cool off, you see a little bit more softening among condos. And then you start to look at some of the multi-family completions that came to market last year, a little bit more vacancy on the apartment side, some more units being put into the market, leading to softer condo price dynamics out there as well.
02:18 Speaker A
And so investors right now seem to be pricing in five rate cuts over the course of 2025. So, a lot of that depends upon what the Fed sees in the data, but do you think that we’ll see significantly lower mortgage rates by the end of the year?
02:39 Andy Walden
That’s a good question. We’ve already started to see them come down a little bit over the last few days. So if you look at loans flowing through Ice’s origination channels, you look at traditional 30-year fixed rate mortgages, you’ve already seen that rate come down to about 6.5% on Friday. If you look at the Ice Futures market, which is where we like to look to see kind of where futures for mortgage interest rates are being priced in, if you look at that as of Friday, it was inferring that the market is anticipating mortgage rates to come down into the 6.25% range by September. And so, already some modest improvements in mortgage rates that we’ve seen with some potential, at least being priced in, in the near term horizon.
03:31 Speaker A
So, do you think that the slower price growth and potentially lower rates will unstick, unstuck, I know it’s not good English, but sometimes it’s good preaching, as my pastor would say, will that ultimately unlock some of the housing market?
04:00 Andy Walden
Yeah, I mean, when you look at the, when you look at the, the buy side, right, uh, potential home buyers out there in the market, you’ve seen them ebb and flow right along with interest rates. And so when interest rates have improved, affordability has improved. You’ve seen a little bit more demand out there in the market. We’ve already started to see the semblance of that this spring. In fact, when you look at February and March, you’re seeing about a little over 5% more mortgage applications out there early this spring than what we were seeing at the same time last year. When you look at home sellers out there, you’re also seeing, uh, not only more new construction in recent years than we’ve seen in the past, but when you look at existing homeowners and their willingness to put their home up for sale, you’ve seen some improvement there this year versus last year as well. So a year ago, we were seeing 25% deficit, 25% fewer existing homeowners listing their homes for sale. Early this year, it’s been roughly a 15% deficit. So still not as many as you would traditionally see, but becoming unstuck a little bit if you will.
05:20 Speaker A
Certainly. And what are some of the, the markets that you’re starting to see elements of that take shape in?
05:28 Andy Walden
Yeah, it’s really the sunbelt region of the country is the one that jumps out the most, right? It’s where you’re seeing more inventory come to market. It’s where you’re seeing that supply get back to or above pre-pandemic levels. It’s also the area where you’re seeing softer price dynamics, and in some cases home prices have come down from the same time last year. In the opposite end of that spectrum, the areas that are still dealing with very deep inventory deficits, the northeast, the midwest regions of the country, and unsurprisingly, that’s where you’re seeing firmer home prices.
06:07 Speaker A
Andy, good to speak with you once again. Thanks for taking the time.
06:11 Andy Walden
You bet. Thanks for having me.
