Homeowners tapped equity during the first three months of the year at the highest first-quarter levels since 2021, according to data from Intercontinental Exchange, Inc. (NYSE: ICE).
The increase was primarily attributed to second-lien lending (54% of equity extraction), which reached its strongest first-quarter volume in nearly two decades as more borrowers sought to maintain their existing low-rate first mortgages. Nearly four million homeowners who took out primary loans from 2020–2022 now have a second lien, while nearly two-thirds of the first quarter’s second-lien originations came from 2020–2022 vintage borrowers.
Average second-lien HELOC rates fell to 6.6% in March, their most attractive level since late 2022.
ICE also found cash-out refinance withdrawals were at their highest first-quarter level since 2022, while second-lien withdrawals posted their strongest first-quarter performance in nearly two decades.
“The housing market continues to be defined by the lock-in effect,” said Andy Walden, head of mortgage and housing market research at ICE. “Millions of homeowners are sitting on first mortgages with rates well below current market levels, making second liens and HELOCs an attractive way to access equity without giving up those loans. While higher mortgage rates have reduced refinance opportunities and softened affordability gains in recent months, home prices continue to firm across much of the country and affordability remains improved from year-ago levels.”
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