An early look at March data from the enhanced ICE Home Price Index (HPI) shows that home prices are softening across the country, which ICE says is largely driven by stabilized mortgage rates, which have been holding around 6.6%-6.7% since mid-March. Annual home price growth slowed to +2.7% in February, with early data for March showing further cooling to +2.2%.
ICE expects mortgage rates to continue to drop, as it noted that 30-year futures pricing currently implies that the market anticipates 30-year rates to dip below 6.4% by September.
At the end of February, ICE says there were 5.4 million recent vintage mortgages (2022-2025) with rates of 6.5% or higher, including 2.5 million at or above 7%, which could equal heavy refinance opportunities in the upcoming months if rates continue to trend downward.
Supply continues to increase
Inventory is also a contributing factor to softening prices. Nationally, the inventory deficit relative to pre-pandemic levels fell from -40% in February 2024 to -23% in February 2025. ICE says that with the current rate of improvement, the market would be on pace to return to pre-pandemic for-sale inventory levels in the back half of 2026.
“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,” said Andy Walden, head of mortgage and housing market research for ICE. “This trend is being driven by improved inventory levels, which are up 27% over last year, and stabilized mortgage rates, which dipped below 6.6% in early March and have been holding in the 6.6%-6.7% range.”
Walden continued, “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. 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% of U.S. markets have experienced at least slight improvements in affordability compared to a year ago.”
Condo prices lagged single-family price growth in 97 of the 100 largest U.S. markets and were down in more than a third of those markets. Florida condo prices dropped the most, as Walden noted, with markets such as North Port (-9.4%) and Lakeland (-7%) seeing significant YoY price slips.
But condo challenges aren’t limited to Florida. ICE’s reported surge in multifamily completions has created price pressure across the country, specifically in metros like Little Rock, Ark. (-6%), Austin, Texas (-5.6%), and Denver (-3.9%).
ICE also noted that Florida homeowners face some unique challenges, including hurricanes, rising property insurance costs, insurability challenges, slowing migration and new construction, all of which have combined to lower home prices in most major Florida markets.
VA foreclosure starts pick up
ICE noted that loans in active foreclosure rose by 2% in February, driven solely by a rise in VA foreclosures, as the market continues to normalize following the expiration of the VA foreclosure moratorium.
While VA foreclosure starts rose 23%, FHA and conventional foreclosure starts dipped by -27%
and -26%, respectively, from January. February foreclosure starts were 35% above last year, but that’s almost entirely due to the resumption of VA foreclosure activity; FHA starts were down -9% and conventional up a modest 4%.
In last month’s ICE first look, FHA loans dominated delinquencies. However, ICE reported that those rising FHA delinquencies have yet to move the needle on foreclosure activity ‒ with the number of active FHA foreclosures up 6% from the same time last year.
As a result of the LA wildfires, an estimated 4,100 homeowners are now past due as of February month-end, up from roughly 700 in the previous month, a figure that includes more than 25% of homeowners with mortgages within the Palisades wildfire perimeter and more than 20% in Eaton, ICE reported.
However, ICE says that daily mortgage performance data suggests delinquencies could reach 4,200 by the end of March before leveling off and slowly improving throughout the rest of 2025.
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