ICE Mortgage Monitor for April: Influence of the ‘Locked-In’ Effect Apparent

(Image courtesy of ICE; Breakout image courtesy of butfirstcaphesuada/

Intercontinental Exchange Inc., Atlanta, released its Mortgage Monitor Report for April, and the “locked-in effect” was front and center. The report highlighted how for many homeowners, giving up their current rate to purchase an equivalently priced home would result in a 40% increase in principal and interest.

From 2000-2022, 40% would be the bump that homeowners looking to upgrade to a place 25% more expensive would see. Now, a similar upgrade would increase a monthly payment by 103%.

Homeowners who snagged the very low end of rates in 2020 and 2021 would pay 60% more a month for an equivalently priced home, and when “trading up” would see a 132% increase in monthly costs.

Such factors–among others–continue to restrain inventory. Housing inventory was still 40% below pre-pandemic averages in February, however, levels rose in 60 of the 100 largest U.S. markets. Sixty-five percent of major markets had more homes for sale than they did in February 2023.

“After closing out 2023 at an 11-year low, home sales have begun to improve over the last two months,” said Andy Walden, ICE Vice President of Enterprise Research Strategy. “In fact, lower interest rates in late Q4 and early Q1 led to February home sales hitting their highest adjusted level since March 2023. With sales rising, and inventory still tight, months of supply edged slightly lower in February, continuing to provide a floor for home prices.”

The February ICE Home Price Index showed adjusted home prices up by 0.43%, up from 0.33% in January, which is equivalent to a +5.3% seasonally adjusted annualized rate.