PLEASANTON, Calif.– Lower mortgage rates earlier this year helped revive both refinance and purchase activity, creating a more balanced mortgage pipeline for lenders and loan officers, according to new data from ICE Mortgage Technology.
ICE reported U.S. home prices increased 0.32% in April on a seasonally adjusted basis, the strongest monthly gain in nearly two years. Annual home price growth also accelerated to 0.9%.
The company said lower rates earlier in 2026 fueled a sharp increase in refinance activity during the first quarter.
According to ICE, first-lien refinance originations reached $242 billion in the first quarter, more than doubling from a year earlier and marking the strongest quarterly refinance volume in four years. Refinances accounted for nearly 44% of all mortgage originations, the highest share since 2022.
ICE said rate-and-term refinances drove much of the activity.
The Findings
Among the findings:
- Rate-and-term refinances accounted for 60% of all refinance loans, the highest share in five years.
- Borrowers who refinanced lowered their monthly mortgage payments by an average of $257.
- Refinancing borrowers reduced their interest rates by an average of 97 basis points.
At the same time, first-time buyers continued to drive purchase activity.
ICE reported first-time buyers accounted for more than half of all purchase loans closed in March, the largest share since mid-2020. The company said FHA and VA loans remained a key entry point into homeownership, with roughly two-thirds of those loans going to first-time buyers.
‘More Responsive’
Unlike existing homeowners who remain locked into lower mortgage rates secured in prior years, first-time buyers are generally more responsive to modest affordability improvements, ICE said.
“Home price growth accelerated in April as softer interest rates raised the ceiling on borrower affordability,” said Andy Walden, head of mortgage and housing market research at Intercontinental Exchange.
Walden cautioned, however, that rising mortgage rates could threaten that momentum.
“The question now is whether that momentum can be sustained in the face of renewed upward pressure on interest rates,” Walden said.
ICE also reported lenders improved operational efficiency during the quarter.
Key Findings
Key operational findings included:
- The average purchase loan closed in 36.8 days in March, the fastest pace recorded since ICE began tracking the metric in 2019.
- Across all loan types, the average closing time was 38.2 days, the third-fastest pace on record.
What Data Also Reveal
ICE said the data suggest the mortgage market is no longer dependent solely on purchase activity and is seeing renewed refinance opportunities, particularly among borrowers seeking modest payment reductions rather than large-scale refinancing waves.
The company said the current environment reflects a hybrid market in which targeted refinance activity and continued first-time buyer demand are driving overall mortgage volume.
