Home price appreciation slowed across the U.S. in February, with condo prices decreasing annually for the first time in more than a decade, according to ICE Mortgage Technology’s latest Mortgage Monitor report.
Annual home price growth slowed to 2.7% in February, with early data for March showing further cooling to 2.2%, the firm says.
Condo prices decreased annually for the first time in more than a decade, with Florida condo prices dropping the most: Markets such as North Port (-9.4%) and Lakeland (-7%) saw significant annual price slips, with other markets, including Tampa (-5.8%), Orlando (-4.4%), Jacksonville (-4.4%) and Miami (-2.8%) not too far behind.
Florida’s homeowners face some unique challenges. Back-to-back hurricanes, combined with rising property insurance costs, insurability challenges, slowing migration and new construction have combined to lower home prices in most major Florida markets.
Condo challenges aren’t limited to Florida. A surge in multifamily completions has created price pressure across the country, especially in metro regions such as Little Rock, Ark. (-6%), Austin, Texas (-5.6%), and Denver (-3.9%).
“Analysis of ICE HPI data shows a broad-based cooling of home prices, with 90 percent of U.S. markets experiencing slower home price growth compared to three months ago,” says Andy Walden, head of mortgage and housing market research for ICE, in a statement. “This trend is being driven by improved inventory levels, which are up 27 percent over last year, and stabilized mortgage rates, which dipped below 6.6 percent in early March and have been holding in the 6.6 percent to 6.7 percent range.”
“Early March data shows condo prices dropping for the first time in more than a decade, with the largest impacts in the Sunbelt, most notably in Florida,” Walden says. “While falling condo prices can erode equity levels among existing condo owners, they also afford modest relief to those looking to prospective home buyers. In fact, 95 percent of U.S. markets have experienced at least slight improvements in affordability compared to a year ago.”
Photo: Brian Zajac