ICE Mortgage Monitor: Recent Vintage Borrowers Pounced on Early-Autumn Rate Drops as 300K+ Refinanced in September and October
- More than 300K mortgage refinances closed in September and October – the most in 2.5 years – as borrowers took advantage of interest rates in the low
- Nearly 150K of those were rate/term refinances, with October marking the first time in 3 years that rate/term volumes outpaced those of cash-out refis
- The average rate/term borrower in September and October cut their first lien rate by more than a point and their payment by
- Mortgage holders refinancing out of and back into Veterans Administration (VA) loans accounted for more than
- More than
When 30-year conforming mortgage interest rates fell into the low
“Homeowners pounced on their incentive to refinance as rates fell through August and September,” said Walden. “More than 300K mortgage holders closed on refinance transactions in September and October, the most we’ve seen in two-and-a-half years. What’s more, almost half of that activity involved the homeowner refinancing into a better rate, with October marking the first time in three years that there were more rate/term than cash-out refinances in a given month.”
ICE Market Trends data also showed that technologically-adept lenders were ready to meet that demand, with average closing times among all loan types – purchase as well as cash-out and rate/term refinances – all hitting their lowest October levels in the five years ICE has been tracking the metric. According to ICE McDash +NextLoan data, which tracks loans before and after a refinance or other prepayment, this is translating into higher retention rates as well, with servicers retaining more than a third of customers refinancing to improve their rate or term, the best in two and a half years. As has been the case in recent years, retention was strongest – nearing
“This brief, but welcome, spike in refinancing was dominated by homeowners quickly ditching their recently acquired mortgages,” Walden continued. “Refinances out of 2023 and 2024 vintages drove an impressive
More than two thirds of all rate/term refinances dropped their rate by more than a full percentage point (pp), while nearly a third were able to improve their rate by 1.5 pp or more. Borrowers with mortgages backed by the VA saw the largest monthly improvements, dropping their rates by 1.28 pp on average in October, as compared to the 1.08 to 1.18 pp declines seen among other loan products and investor classes
"As you'd expect," Walden continued, "the interest rate threshold at which a given homeowner would be enticed to pull the trigger on a refi varied by loan size. Nearly half of refinancing borrowers with balances between
Refinances from and back into VA mortgages accounted for approximately
Much more information on these and other topics can be found in this month’s Mortgage Monitor.
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ICE manages the nation’s leading repository of loan-level residential mortgage data and performance information covering the majority of the overall market, including tens of millions of loans across the spectrum of credit products and more than 160 million historical records. The combined insight of the ICE Home Price Index and Collateral Analytics’ home price and real estate data provides one of the most complete, accurate and timely measures of home prices available, covering
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Source: Intercontinental Exchange
Category: Mortgage Technology
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Source: Intercontinental Exchange