ICE Mortgage Monitor: Q1 Sees Record Levels of Tappable Equity

(Image courtesy of ICE; Breakout image courtesy of Lisa Fotios/pexels.com)

Intercontinental Exchange Inc., Atlanta, released its ICE Mortgage Monitor report for May, finding that homeowners with mortgages closed out the first quarter with a record $16.9 trillion in equity–$11 trillion of which was tappable.

By that, ICE means it could be accessed via a cash-out refinance or second lien home equity product while the owner still maintained at least a 20% equity cushion.

The average borrower now has $206,000 in tappable equity, up from $185,000 at the same time last year. Approximately 48 million mortgage holders have some amount of tappable equity in their homes that could be accessed even under conservative CLTV ratio limits.

And, the share of underwater mortgages has continued to fall, with just 0.72% of all active loans.

Andy Walden, ICE’s Vice President of Enterprise Research Strategy, noted a large chunk of this equity is geographically concentrated.

“Just five West Coast markets–Los Angeles, San Francisco, San Jose, San Diego and Seattle–account for nearly a quarter of all tappable equity available,” Walden said. “Not only do these borrowers hold a cumulative $2.7 trillion in tappable equity, but they also tend to have first lien interest rates well below the national average due to more frequent refinance activity among high-balance loans. The same holds true in other metropolitan areas such as New York and Washington D.C., which account for another $1.1 trillion in tappable equity.”

Among other findings in the Mortgage Monitor, home price growth remained solid in March, with unadjusted home prices up 1.2% and seasonally adjusted up 0.42%.

On an annual basis, home price growth was up 5.6%, down slightly from an upwardly revised 6% in February.

In addition, supply remains a challenge. There are 38% fewer homes on the market than there were on average in March 2017-2019. But, that’s an improvement from a 40% shortage the previous month.