Almost 1.3 million mortgages — together with greater than 500,000 originated in 2025 — carry charges between 6.875% and 6.99%, essentially the most delicate group to current price declines. ICE cited information from the Mortgage Bankers Affiliation, which discovered that refinance exercise hit a 17-week excessive within the week ending Jan. 16, with refinances making up 62% of all functions. ICE estimates about two-thirds of those originations have been rate-and-term refis.
However the lock-in impact stays inflexible. At the beginning of 2025, 39.4 million owners had mortgages under 5%, together with 12.6 million with charges under 3%. On the finish of 2025, these numbers have been 37.2 million (-6%) and 12.1 million (-5%), which signifies that about 95% of low-rate debtors continued to carry onto their current mortgages.
“Even small reductions towards 6% charges can considerably increase affordability, significantly for owners who may refinance right into a decrease price and month-to-month funds,” Andy Walden, head of mortgage and housing market analysis at ICE, mentioned in an announcement.
“When charges hit 6.04% on January 9, the variety of owners within the cash to refinance jumped by 20% and affordability hit its greatest stage in 4 years. That mentioned, affordability stays structurally challenged, with dwelling costs nonetheless elevated relative to incomes and significant variations rising throughout areas and borrower segments.”
“In the present day’s market is filled with cross‑currents — debtors responding shortly to price shifts, affordability bettering for some however not others, and pockets of rising credit score stress,” mentioned Bob Hart, president of ICE Mortgage Know-how. “Our end-to-end mortgage platform helps servicers and lenders make sense of these transferring elements and act on alternative.”
Mortgage efficiency
Affordability improved in early January because the month-to-month principal-and-interest fee wanted to purchase the average-priced dwelling fell $164 yr over yr to $2,091, lowering the share of median family revenue required to purchase to 27.8%.
Nonetheless, the nationwide home-price-to-income ratio stays round 4.8 to 1, above the long-term common of roughly 4 to 1.
Greater than 1.1 million debtors ended 2025 underwater, the very best stage recorded since early 2018. The damaging fairness was closely concentrated amongst Federal Housing Administration (FHA) and U.S. Division of Veterans Affairs (VA) loans originated in 2022 or later, ICE mentioned.
On a regional foundation, a number of Southern markets now have greater than 10% of mortgaged properties underwater, though nationwide fairness ranges stay traditionally robust.
ICE reported that the nationwide delinquency price dipped 16 foundation factors (bps) in December, touchdown at 3.68%. Early-stage delinquencies improved, however 90-day-plus delinquencies rose by 30,000 and at the moment are at their highest level in nearly three years — 19,ooo extra that presently final yr.
U.S. dwelling costs rose simply 0.6% in 2025, the smallest annual enhance since 2011. The Northeast and Midwest confirmed relative stability, whereas declines within the South and West weighed on nationwide averages.
