Weaker purchase demand has held down spring homebuyer activity, but one silver lining has been some gradual improvement of the housing supply shortage, according to the latest Mortgage Monitor report from Intercontinental Exchange (ICE).
Inventory is up 30% annually in April and hit its highest seasonally adjusted level since the middle of 2020, per ICE’s data. Nearly 90% of markets evaluated by ICE logged stronger inventory levels during the month than they did in April 2024.
Fourteen of the medium to large markets tracked by ICE, in fact, have seen inventory rebound to pre-pandemic levels, although geographical divergence remains strong. Consider that of the 14 aforementioned metros, 13 are in Florida or Texas. Every Florida market evaluated by ICE had at least 50% more inventory in April than at the same time last year; Cape Coral led the nation with an 87% annual jump.
Meanwhile, supply is still significantly limited in much of the Northeast, with Hartford, Connecticut, posting the lowest inventory level relative to same-month pre-pandemic averages.
Home prices have reacted to recent inventory shifts. For example, of the seven largest metros where inventory has reached or exceeded pre-pandemic levels, five experienced a reduction in seasonally adjusted median home price.
“Inventory seems to be the primary differentiator when it comes to the bifurcation we’re seeing in housing market temperatures across the country,” said Andy Walden, ICE’s vice president of enterprise research strategy. “Generally speaking, the Northeast and Midwest still face deep deficits in available homes for sale, helping prices continue to run hot.
“On the other end of the spectrum, prices are softening in Florida and Texas as for-sale inventories rise in both states. Then you’ve got California, where affordability and inventory are in a steel cage match to determine dominance. In April, each of the state’s top 10 markets either registered below-average growth or clocked adjusted price declines.”
On the whole, annual home price growth cooled nationally in April, with ICE’s Home Price Index receding for a second straight month. ICE recorded year-over-year national price gains of 5.1% in April, down from 5.7% in March and 6.1% in February.
“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,” Walden said. “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 [monthly] 0.28% increase in home prices a marked downshift from 0.45% in March. That’s equivalent to a 3.4% seasonally adjusted annual rate, suggesting annual growth will likely continue to slow in coming months.”
Walden also noted that despite the inventory improvement on a national scale, there’s a ways to go before the supply picture returns to any measure of equilibrium. There were still about 36% fewer listings than normal in April compared to historical norms.
