The February 2026 ICE Mortgage Monitor Report has been published by Intercontinental Exchange, Inc. The analysis indicates that the drop in mortgage rates at the start of January created refinancing opportunities for almost five million borrowers and contributed to affordability reaching a four-year peak.
“Even small reductions toward 6% rates can significantly boost affordability, particularly for homeowners who could refinance into a lower rate and monthly payments,” said Andy Walden, Head of Mortgage and Housing Market Research at ICE. “When rates hit 6.04% on January 9, the number of homeowners in the money to refinance jumped by 20% and affordability hit its best level in four years. That said, affordability remains structurally challenged, with home prices still elevated relative to incomes and meaningful differences emerging across regions and borrower segments.”
Key findings:
- Refinance incentives surged to a nearly four-year high following early-January interest rate declines.
On January 9, interest rates reached 6.04%, according to the ICE 30-year conforming fixed rate index, which put roughly 4.8 million borrowers “in the money” for a refinance—the highest level since early 2022. That drop effectively increased the eligible population by 20% overnight. Although some of that benefit has since receded, the episode underscores how sensitive the market is to rate shifts in the high‑5% to low‑6% range. Nearly 1.3 million recently originated mortgages carry rates between 6.875% and 6.99%, including more than half a million from 2025, making it the most common rate band last year, and the most sensitive to interest rate drops.
- Housing affordability reached its best level since early 2022, but remains stretched by historical standards.
In early January, the monthly principal and interest payment needed to purchase the average-priced home fell by -$164 (-7%) year over year to $2,091, reducing the share of median household income required to 27.8%. Despite the improvement, the national home price-to-income ratio remains elevated at roughly 4.8:1, well above its long-run average near 4:1. To revert back to pre-pandemic home price-to-income ratios, household incomes would need to rise a little over 15%, assuming home prices remain flat.
- Negative equity is increasing modestly, concentrated in recent vintages and select Southern markets.
More than 1.1 million borrowers ended 2025 underwater — the highest level since early 2018 — with negative equity heavily concentrated among FHA and VA loans originated in 2022 or later. Several Southern markets now have more than one in 10 mortgaged homes underwater, even as national equity levels remain historically strong.
- Home price growth slowed to its weakest pace in more than a decade, with regional divergence widening.
In 2025, home prices in the U.S. increased by only 0.6%, representing the smallest annual growth since 2011. While the Northeast and Midwest continue to offer stability, price drops in the South and West are increasingly impacting national averages.
“Today’s market is full of cross currents—borrowers responding quickly to rate shifts, affordability improving for some but not others, and pockets of rising credit stress,” said Bob Hart, President of ICE Mortgage Technology. “Our end-to-end mortgage platform helps servicers and lenders make sense of those moving parts and act on opportunity. It gives them a clearer view of who might benefit from refinancing, where portfolio risks are building, and how to engage customers with the right options at the right time—all while supporting timely follow-through.”
The complete February Mortgage Monitor report includes a more thorough examination of payment performance trends and housing market trends, incorporating ICE Home Price Index (HPI) data.
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