June 2025 Mortgage Report: Record HELOC withdrawals seen since 2008

Vermont has seen an increase in the percentage of noncurrent mortgages. The ICE Mortgage Monitor June 2025 report reveals that there are record levels of home equity in the United States, with $17.6 trillion available in the second quarter of 2025, out of which $11.5 trillion is considered “tappable,” meaning it can be borrowed while maintaining a 20% equity buffer.

The state of Vermont boasts the highest percentage of home equity in the nation. Despite a previous trend of low withdrawal rates, recent data from early 2025 indicates a shift in borrower behavior. Second lien equity withdrawals increased by 22% year over year to nearly $25 billion in the US during the first quarter of 2025, marking the highest first quarter volume in 17 years. This suggests a growing interest in accessing home equity due to improved loan affordability.

Andy Walden, the Head of Mortgage and Housing Market Research at ICE, noted that equity levels are at historically high levels, and the cost of borrowing against this equity has significantly decreased. The monthly payment required for a $50,000 withdrawal through a HELOC has reduced by over $100 since early 2024. If anticipated rate cuts by the Federal Reserve materialize, borrowing against home equity could become even more appealing in the latter half of the year.

The average introductory rate for second lien HELOCs has dropped by 2.5 percentage points recently, falling below 7.5% in March. Projections indicate that HELOC rates could dip into the mid-6% range by 2026, aligning with expected 30-year mortgage rates. This reduction in rates has led to lower monthly payments for borrowers. The average monthly payment to borrow $50,000 decreased from $412 in early 2024 to $311 by the end of the first quarter of 2025.

Additional highlights from the June 2025 Mortgage Monitor report include:

– 48 million mortgage holders possess tappable equity, with the average homeowner holding $212,000.
– Mortgaged homes have an average 45% leverage, indicating a substantial cushion for equity access.
– Lenders are offering more competitive HELOC rates, with the spread to prime dropping to levels last seen in 2022.
– Equity withdrawals, including cash-out refinances, totaled $45 billion in the first quarter of 2025, marking the highest first quarter volume since 2022.
– Borrowers tapped only 0.41% of their available tappable equity in the first quarter of 2025, below long-term averages.

The data also suggests that about 25% of homeowners are contemplating a home equity loan or HELOC within the next year. This convergence of demand and affordability provides a critical opportunity for housing finance professionals to engage with homeowners and build a lasting relationship.

ICE Mortgage Technology’s advanced end-to-end mortgage platform aims to help lenders and servicers connect with borrowers through relevant offers while maintaining cost-effectiveness. The report also includes a detailed analysis of April mortgage performance data and a housing market update featuring May ICE Home Price Index data. For more information and charts, refer to this month’s Mortgage Monitor.