American homeowners removed 2% more equity from their properties year-over-year in the first quarter, the most for the three-month period since 2021, ICE Mortgage Technology found.

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It estimated $47 billion in equity was withdrawn in the quarter, down from $49 billion in the fourth quarter but up from $46 billion in the first quarter of 2025, according to data from the June ICE Mortgage Monitor report.

While the use of second lien products had a slight majority in terms of how equity was accessed, the period also saw significant percentage growth in cash-out refinancings.

The number of borrowers taking a cash-out refi grew 18% compared with the first quarter of 2025, to about 234,000, with the group withdrawing a total of $22 billion. This was up 2% from a year ago, with an average of $93,000 per borrower.

Meanwhile, 248,000 homeowners opted to tap equity via a second lien, withdrawing $25 billion, a gain of 1%.

The “lock-in effect” for pandemic-era borrowers whose rates are still well below the current market, drove the growth in second lien products. Nearly two-thirds of the home-equity product volume in the first quarter came from borrowers who took out a first mortgage between 2020 and 2022; a total of 3.9 million people who have a mortgage of those vintages added second liens, ICE Mortgage Technology said.

But the cash-out borrowers came from a broader range when it comes to their original loans. Nearly half of them got their last first lien in 2023 or later, while one-quarter was from the 2020-2022 period.

Rates for second lien home equity lines of credit fell to 6.6% in March, which ICE said was the most attractive for the product since late 2022. The average introductory HELOC rate fell slightly below the prime rate, which it attributed to increasing aggressive lender competition for this business.

The data does not include any home equity product originated as a first-lien. It only includes loans with an existing first which now have a second lien as determined through linking McDash data from ICE with public records.

When it comes to extracting equity, historically cash-out refinances have led the way, said Andy Walden, head of mortgage and housing market research for Intercontinental Exchange.

“We’ve been in kind of the most predominant second-lien era that we’ve seen over the last 20 years,” Walden said in an interview. “Since 2022, it’s been running above 50% seconds for all the reasons that you expect, trying to hold on to those low rate firsts that they took out in ’20 and ’21.”

Right now, the market is at the higher end of the spectrum in terms of second lien utilization.

The high point was in the third quarter of 2024 at 58%, with the first quarter of this year at 54% second-lien share. Historically, the split was around 60%-40% in favor of cash-out refinanices, Walden said.

Home equity lending activity is likely to slow going forward. This is in part because home price growth has been slowing, meaning less of it can be tapped, Walden said.

It’s worth keeping an eye on rates for second-lien products. Many HELOC lenders index these loans to the prime rate. When the Federal Open Market Committee changes the Fed Funds Rate, many banks will in turn raise or lower their prime rate by the same amount.

Latest bets regarding the FFR have shifted to a 70% probability that short-term rates will be increased if and when the FOMC votes to make a change, Walden pointed out.

This will put pressure on HELOC rates. Looking at the spreads for HELOCs right now they are slightly below prime on average, “so they’re already being aggressive,” Walden pointed out. An increase by the Fed could eat into home equity lending growth.

But the spread between HELOCs and the 30-year fixed could remain relatively tight, which could keep homeowners more interested in second lien products rather than cash-out refis, ICE said.

ICE noted rising interest rates since the end of February has reduced the number of borrowers who have a financial incentive to refi to 1.8 million as of May 21. This compared with 5.4 million during a brief period when the 30-year fixed fell under 6%.

In current conditions, the 30-year FRM would have to fall below 6.25% to drive a meaningful rebound in refi volume. For the week of June 4, the 30-year was at an average of 6.48%, according to Freddie Mac.

Cash-out refi apps had a 65% share in late May versus those homeowners seeking new mortgages for rate-and-term reasons. This particular dataset ICE is able to obtain from its Encompass loan origination system and thus can see the rate lock activity on a timelier basis.

ICE uses Mortgage Bankers Association weekly application survey and then takes the Encompass rate lock data to make its determinations.

I was on LinkedIn the other day and came across a post featuring a mortgage rate history chart with rates for each year.

It started with 1975, when the 30-year fixed apparently averaged 9.0%, 1980 when it was supposedly 14.4%, and 2015 when it was 4.0%.

For whatever reason they skipped a lot of years in between, I suppose to make the chart more concise.

But what jumped out at me was the fact that mortgage rates were in the 2-3% range in 2012 and 2013 and didn’t make the chart.

It seems a lot of people either don’t know that or don’t remember.

You Could Get a 2-3% Mortgage Rate in 2012 and 2013!

Believe it or not, it wasn’t just 2020 and 2021 when mortgage rates were at their lowest.

Sure, the 30-year fixed technically hit its all-time low in January of 2021, per Freddie Mac data.

And the 15-year fixed hit its record low in July 2021.

But there were some incredibly good years for mortgage rates nearly a decade earlier.

Not only that, but home prices were about 50% off at the time as well!

So if you had purchased real estate in 2012-2013, you likely made out really, really, well.

Anyway, I saw the chart and commented that mortgage rates were also sub-3% in 2012 and 2013.

Most responded to be with doubt or snarky sarcasm, so I took the time to review some old Freddie Mac mortgage rate data.

Didn’t take long to find it. In the Primary Mortgage Market Survey (PMMS), I found that 30-year fixed rates were in the low 3s during 2013.

The lowest was 3.34% in January of 2013. And in 2012, spent nearly the entire second half of the year at 3.50% or lower, as seen above.

In case you’re unaware, Freddie Mac mortgage rates are mere averages and actual rates can be a lot lower (or higher).

But I fondly recall many people snagging rates in the 3s and even sub-3% rates back then.

My Friend Got a 2.75% Mortgage Rate Nearly 15 Years Ago!

A vividly remember a friend of mine got a 2.75% 30-year fixed way back then and a super low purchase price to boot!

If we turn our attention to 15-year fixed mortgages, they were even lower, averaging around 2.625% to 2.75% for a good chunk of the year.

So it wasn’t just pandemic-era mortgage rates that were sub-3%. A full decade earlier home buyers were snagging these low interest rates.

And they made out even better, as noted, because home prices were about 50% lower at the time as the market was still recovering from the early 2000s housing crash.

As for why mortgage rates were that low back then, it was the same story as 2020-2021.

The Federal Reserve was running Quantitative Easing (QE) at that time as well and buying billions in mortgage-backed securities (MBS) to push mortgage rates lower.

Whether they needed to do it again a decade later is a bigger question, as all that easy money led to another big wave of inflation and arguably wasn’t really necessary.

Read on: Try my mortgage rate calculator to quickly compare interest rates an .125% to 0.25% (or more) apart to determine the difference in payment and total interest expense.

(photo: Michael Coghlan)

Before creating this site, I worked as an account executive for a wholesale mortgage lender in Los Angeles. My hands-on experience in the early 2000s inspired me to begin writing about mortgages 20 years ago to help prospective (and existing) home buyers better navigate the home loan process. Follow me on X for hot takes.

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