Report
AEI Housing Market Indicators, January 2025
February 04, 2025
The American Enterprise Institute’s Housing Center released its monthly update to the AEI Housing Market Indicators on February 4, 2024.
Video Recording
Key Takeaways
- Purchase Activity Outlook Given Headwinds.
- October 2024 agency purchase volume was down 2% from a month ago, up 2% from a year ago, and down 31% from October 2019 (pre-pandemic level). Based on ICE projection, purchase volume will continue to trend down through February 2024.
- Analysis using ICE purchase rate lock data shows an inverse relationship between both the pull-through rate and mortgage rate and the time it takes from lock to close and the mortgage rate.
- Year-over-Year (YoY) HPA in December 2024, Given Rate Headwinds, Remains Robust at 4.6%.
- December 2024’s preliminary YoY HPA was 4.6%, the same as a month ago, but down from 5.7% a year ago.
- YoY HPA is projected to decrease to 3.6% in January 2025 and again to 2.6% in February 2025.
- The strong seller’s market continued in December 2024 with months’ remaining supply tightening by 0.5 months from November 2024 to 3.6 months (not seasonally-adjusted). Housing inventory remains near pre-pandemic levels.
- How changing HOA fees are affecting Florida condo prices.
- Since early 2023, Florida condo monthly HOA fees have surged by 31%, significantly outpacing the national median increase of 10%.
- The surge in condo HOA fees has likely contributed to a moderate price slowdown in Florida’s condo market compared to the single-family detached (SFD) home market.
- As of December 2024, Florida condo HPA declined by 5% year-over-year, while SFD home prices remained unchanged.
- A New FHA Mortgage Insurance Premium (MIP) Would be a Mistake.
- With a new federal administration in place, it has been suggested by some that a reduction in FHA mortgage insurance premium (MIP) would “help” borrowers struggling with higher mortgage rates.
- Just like prior MIP cuts, such a policy change during a sellers’ market will not help prospective homebuyers and exposes taxpayers to increased default risk.
- Rather than cutting the MIP on 30-year loans, FHA should hold on to its reserves.
- Why the National Flood Insurance Program (NFIP) Is a Cautionary Example Against Nationalizing the Property Insurance Market.
- As the share of homeowners without home insurance has increased, calls for a national program have gained traction. However, as the National Flood Insurance Program (NFIP) shows, such a program would likely not end well.
- The NFIP, established in 1968, had two primary goals: reducing future flood damage and protecting property owners.
- However, decades of mismanagement, underpriced risk, political interference, and financial insolvency make it a case study in why nationalizing the property insurance market would be a mistake.
- Quantifying the potential impact of BLM land sales on affordability – Clark County, NV.
- Homes built in Clark County since 2012 and within half a mile of Bureau of Lan Management (BLM) land could have been used more intensively with big payoffs for supply and affordability.
- Updated Good Neighbors Index and the lessons for homelessness and displacement.
- Compared to 2023, displacement rates and homeless counts increased in 2024 by an average of 23% across CoCs.
- Over time, extreme displacement pressure (median price to median total income) leads to an increase in displacement rates (homeless count per 1,000 people).
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