December 28th, 2023
Intercontinental Exchange, Inc. (ICE), commonly known as ICE, released its December 2023 ICE Mortgage Monitor Report. The report delves into the real estate and mortgage landscape, emphasizing the resurgence of tappable equity and its implications.
Despite a recent cooling in rising home prices, tappable equity has nearly reached its 2022 peak. However, homeowners seem hesitant to leverage this equity due to elevated interest rates. Andy Walden, ICE’s VP of Enterprise Research, highlights that despite increased equity availability, homeowners are withdrawing significantly less than historical averages. This cautious approach translates to billions of dollars in ‘missing’ withdrawals that could have stimulated the economy.
Additionally, the rise in equity levels contributes to low default and foreclosure rates in the current market. Even with a slight increase in foreclosure starts, the overall picture remains positive due to borrowers’ strong equity positions. Measures to avoid foreclosure are more extensive now, with ongoing loss mitigation efforts protecting a significant portion of seriously delinquent loans.
The report also sheds light on the mortgage market dynamics, revealing that cash-out refinances dominate, comprising 92% of third-quarter activity, with an average withdrawal of $104,000. Purchase loans continue to dominate overall lending and are projected to represent 75% of all mortgage lending in the coming year.
Key data points highlighted by ICE include the continued rise in home prices, contributing to increased equity withdrawals but still below historical averages. Despite challenges posed by rising rates, cash-out refinances persist as a driving force in the market. Purchase lending remains strong, but rising interest rates have increased debt-to-income ratios and led to higher credit score requirements for loans.
Additionally, the rise in equity levels contributes to low default and foreclosure rates in the current market. Even with a slight increase in foreclosure starts, the overall picture remains positive due to borrowers’ strong equity positions. Measures to avoid foreclosure are more extensive now, with ongoing loss mitigation efforts protecting a significant portion of seriously delinquent loans. The report also sheds light on the mortgage market dynamics, revealing that cash-out refinances dominate, comprising 92% of third-quarter activity, with an average withdrawal of $104,000. Purchase loans continue to dominate overall lending and are projected to represent 75% of all mortgage lending in the coming year. Key data points highlighted by ICE include the continued rise in home prices, contributing to increased equity withdrawals but still below historical averages. Despite challenges posed by rising rates, cash-out refinances persist as a driving force in the market. Purchase lending remains strong, but rising interest rates have increased debt-to-income ratios and led to higher credit score requirements for loans. Overall, the report emphasizes the careful balance between rising home equity, cautious borrowing behaviors, and the broader implications for the mortgage market and economy.
At Quintessential Mortgage Group we are actively conducting thorough research, considering the numbers, and evaluating potential costs and savings for both purchasing or refinancing. We’ll be there with you every step of the way.
Contact us for more information!
