Despite softening in the labor market and resumed student loan repayments, mortgage performance remains strong and delinquency data show little sign of stress.
That’s according to the latest ICE Mortgage Monitor analysis for September, which offered a sweeping look at the mortgage and housing landscape — with Andy Walden, ICE’s VP of research and analysis, and Gunnar Blix, ICE’s housing market research manager, outlining key takeaways for lenders, investors, and servicers.
“Quite frankly, [weakness] is hard to find,” Walden said. “Delinquencies came down eight basis points from June to July, and they remain about 60 basis points below pre-pandemic levels.”
FHA loans remain the focal point of delinquency conversations, still accounting for half of all serious delinquencies, but performance is showing modest improvement even in that segment. Walden emphasized that 2020–2021 vintage loans — representing one in three active mortgages today — continue to anchor stability due to historically low interest rates and strong performance.
Property Insurance A Growing Burden
Blix flagged property insurance as the fastest-rising component of homeownership costs.
“The average single-family mortgage holder now pays nearly $2,370 a year for property insurance,” he said. “That’s a record 9.6% of mortgage-related expenses.”
Since 2019, insurance costs are up 69% — more than double the increases seen in principal, interest, or taxes. While premium growth has slowed in 2025, regional disparities are stark: California markets face double-digit jumps following wildfires, while Florida has seen some relief as reforms attract private insurers back into the state.
Rates Ease Below Key Threshold Of 6.5%
Mortgage rates slipped to 6.54% in late August, their lowest since April, and have continued to decline slightly. Futures markets point to a high probability of a Fed rate cut in September, with potential for rates to break more firmly below 6.5%.
“That’s a needle mover for refinance incentive,” Walden noted. “Dropping below that level expands the universe of ‘in-the-money’ borrowers from about 2 million to 2.5 million.”
Affordability has improved slightly — with median-income buyers now spending just under 31% of income on the median-priced home — but remains well above the long-term norm of 24-25%.
Housing Supply Stalls, Prices Firm
After strong gains in available inventory through 2024 and early 2025, the recovery has flatlined at about a 13% deficit to pre-pandemic levels. Sellers are increasingly pulling listings or holding back when prices don’t meet expectations.
That dynamic, coupled with softer rates, has firmed up home prices. ICE’s Home Price Index showed national prices were essentially flat in August, breaking a seven-month streak of cooling. Ninety of the 100 largest markets saw prices stabilize or tick upward.
Equity Extraction Ticks Higher
Borrowers withdrew $52 billion in home equity in Q2 — the largest quarterly volume in nearly three years. Second-lien HELOC volumes are just shy of long-term highs, supported by falling HELOC rates.
“It’s become a lot more affordable to withdraw equity,” Walden explained, pointing to monthly payments on a $50,000 HELOC dropping about 25% from last year.
