00:00 Speaker a
According to the Intercontinental Exchange, mortgage monitors in April 2025, house prices rose to 2.2%, and 95% of the market showed an increase in affordability, from the same era (a year ago). Join me for more information now for more information on reports and housing market conditions, and we have Andy Walden, head of mortgage and housing market research. Andy, I'm glad to see you again. What are your biggest gains from this report?
00:37 Andy Walden
Yes, I think it's not only slowing down the slowdown in home price growth, we've seen it in the last three months, but you're starting to see some differences in the apartment market, which I think is really interesting. In fact, our highest house price index shows that apartment prices have fallen slightly from the same period last year. This is the first time we have seen this since 2012. Therefore, you see that the overall housing price growth rate in most markets across the country is low and apartment prices have also eased.
01:10 Speaker a
Therefore, apartment prices do fall in several markets. How do you view this trend?
01:17 Andy Walden
Yes, I think there are several different reasons. First, if you look at the overall slowdown in the housing market, it is related to the rise in inventory levels. You've seen them almost all over the country since the same time last year. When you look at apartment prices, I think there are a few things that stand out. First, the apartment market is often more volatile than a single family home. So when the market heats up, you'll see a little overgrowth in this apartment space. As the entire housing market starts to calm down, you will see more softening between apartments. Then you start looking at some of the multifamily completed houses that launched the market last year, with more vacancies in the apartments and more units coming into the market, which also leads to softer apartment price dynamics.
02:18 Speaker a
Therefore, investors now seem to be pricing at the 2025 reduction rate. So a lot of that depends on what the Fed sees in the data, but do you think we will significantly lower mortgage rates by the end of this year?
02:39 Andy Walden
This is a good question. Over the past few days, we have started to see them drop a little. So if you look at loans browsing the ICE originating channel, then look at traditional 30-year fixed-rate mortgages, and you've seen that rate drop to about 6.5% on Friday. If you look at the ICE futures market, this is what we would like to see to see where futures for mortgage rates are, if you as of Friday, it can infer that the market expects mortgage rates to drop to the 6.25% range in September. So, on the recent horizon, we have seen some modest increase in some potential mortgage rates.
03:31 Speaker a
So, do you think slower price growth and potentially lower interest rates will fall off, not stubborn, I know this is not a good English, but sometimes, as my pastor said, it is good preaching and will eventually free up some housing market?
04:00 Andy Walden
Yes, I mean, when you look at the buying aspect of the market, uh, potential home buyers, you've seen them tide with interest rates. Therefore, when interest rates increase, affordability increases. You have seen more demand in the market. We've already started seeing what this spring looks like. Actually, when you look at February and March, you see mortgage applications in early spring than you saw last year at the same time. When you look at home sellers there, you also see, uh, in recent years, not only the new building we have seen in the past, but also when you look at existing homeowners and their willingness to sell the home, you also see some improvements this year vs last year. So, a year ago we saw a 25% deficit and existing homeowners listed 25% of homes for sale. At the beginning of this year, there was a deficit of about 15%. So, it's still not as much as you have seen in tradition, but it becomes a little lost if you want.
05:20 Speaker a
certainly. What markets are you starting to see?
05:28 Andy Walden
Yes, this is actually the sunny area of ​​the country that jumps out the most, right? Here you can see more sources of inventory. Here you can see supply returns to pre-pandemic levels. This is also the area where you see soft price dynamics, in some cases house prices have dropped from the same time last year. On the other side of the range, areas that are still dealing with very deep inventory flaws, the Northeast, the Midwest part of the country, and no surprise, this is where the prices you see are stronger.
06:07 Speaker a
Andy, I'm glad to talk to you again. Thank you for taking the time.
06:11 Andy Walden
You dare to bet. Thank you for having me.
