“Underpinning it all, February’s dip in mortgage rates expanded the refinance-eligible population to 5.4 million borrowers, the largest pool we’ve seen since early 2022, further improving affordability, which is at its best level in nearly four years,” he added.
About 565,000 first-lien refinances closed in the fourth quarter, up roughly 50% from a year earlier and the highest quarterly volume since the second quarter of 2022.
Affordability also improved compared with a year earlier. The monthly payment required to purchase an average-priced home fell 8% to $2,063.
Homeowners continued to tap equity as well. Borrowers withdrew $52 billion in home equity in the fourth quarter, bringing the total for 2025 to $205 billion, marking the highest annual amount since 2022. Of that, $116 billion came from second liens, the largest annualized second-lien volume since 2007.
Overall, homeowners hold nearly $17 trillion in equity, about $11 trillion of which is considered tappable, the report explained.
Insurance costs also continued rising, albeit at a slower pace. Average annual property insurance payments increased 6.6%, or $149, in 2025 to a record high, but the growth rate was the slowest since 2020. The fourth quarter also marked the first quarterly decline in insurance costs since ICE began tracking monthly data in late 2023.
ICE research also found that borrowers facing the highest insurance burdens were significantly more likely to fall behind on mortgage payments. Those in the highest insurance-cost quintile were at least 22% more likely to be delinquent than those in the lowest quintile of credit score tiers analyzed.
Servicers also retained a larger share of borrowers who refinanced. One in three refi borrowers stayed with their servicer in the fourth quarter, the strongest retention rate since early 2014. Retention among rate-and-term refinances reached 40%, a 14-year high.
“The trends we’re observing underscore how quickly rate shifts can reshape borrower opportunity, lender volume and portfolio performance,” said Bob Hart, president of ICE Mortgage Technology. “As refinance incentives return and retention improves, mortgage organizations need technology that helps them identify opportunity faster, engage borrowers more effectively and execute efficiently across the lifecycle.”
