U.S. annual home price growth cooled in April, falling to 5.1% – down from a revised 5.7% in March and down from 6.1% in February, according to the ICE Home Price Index (HPI).
Similarly, unadjusted monthly home price gains – at 0.88%- in April dipped below the 25-year same-month average for the first time this year.
Adjusted for seasonality, U.S. home prices increased 0.28% in April – down from March’s 0.45% – equivalent to a seasonally adjusted annualized rate (SAAR) of 3.4%.
“With 30-year rates easing and affordability improving entering the year, unadjusted monthly price gains had been running above their same-month 25-year average since the start of 2024,” says Andy Walden, vice president of enterprise research strategy for ICE, in the firm’s latest Mortgage Monitor report. “However, softening price growth in April has dropped us below that long-run average.”
“We’ve seen the rate of appreciation slow on an adjusted level as well, with April’s +0.28 percent increase in home prices a marked downshift from +0.45 percent in March. That’s equivalent to a +3.4 percent seasonally adjusted annual rate, suggesting annual growth will likely continue to slow in coming months.”
If adjusted monthly home price gains were to continue at their current pace of 0.28% per month, the annual growth rate metric would fall below 4.25% in June, with home prices seeing year-over-year gains of less than 4% by July, according to the report.
However, as Walden notes, both supply and demand remain constrained in the housing market, and interest rate movements in either direction can impact prices.
Photo: Gustavo Zambelli