ICE: Falling rates boost refinance retention to 3.5-year high

"ICE found that overall mortgage performance was strong in October, with the national delinquency rate falling by 7 basis points (bps) to 3.34%. That's down 11 bps from the same time last year and 53 bps below the October 2019 pre-pandemic benchmark. Andy Walden, ICE's head of mortgage and housing market research, said modest rate relief this fall sparked a jump in mortgage applications and added to the strong performance."

"Rate-and-term refinances made up 62% of all refi activity in October, the highest share in almost five years, ICE said. Nearly all (95%) rate-and-term refis in September and October involved borrowers with 202325 vintage loans. These borrowers carried an average loan balance of $505,000 and a credit score of 762, and they cut their mortgage rates by an average of 0.92 percentage points, saving roughly $200 per month."

Overall mortgage performance was strong in October, with the national delinquency rate falling seven basis points to 3.34%, down 11 bps year-over-year and 53 bps below October 2019. Modest rate relief this fall sparked a jump in mortgage applications and drove the highest concentration of rate-and-term refinances in nearly five years, largely among 202325 vintage loans. The market has become more rate sensitive as borrowers move in and out of refinance incentive with small daily rate shifts. Nonbank servicers retained borrowers at 35% versus 13% for banks. FHA and VA loans showed 36% retention; Fannie and Freddie 25%; privately securitized loans 6%.

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