The 15-year FRM averaged 5.80% as of July 03, down from the previous week when it averaged 5.89%, according to Freddie Mac. A year earlier, the 15-year rate was 6.25%. Meanwhile, the 30-year FRM was 6.67%.
Home prices slow
ICE’s Home Price Index indicates that annual home price growth has cooled to 1.3% as of early June. Roughly 30% of the largest housing markets have seen prices decline by at least one percentage point from recent highs.
This deceleration may help with affordability in theory, but ICE cautioned that it could erode the equity positions of borrowers who purchased more recently, especially those who used low-down-payment loans such as FHA and VA products. ICE data shows that one in four seriously delinquent loans nationwide would be in negative equity if sold at distressed prices.
Some local markets are already experiencing sharper effects. In Cape Coral, Florida, 27% of all 2023 and 2024 vintage loans are currently underwater. In Austin, Texas, 18% of loans originated in 2022 have fallen into negative equity territory.
“Borrowers with minimal equity — particularly those who purchased recently — are often the first to be exposed when home prices soften,” said Andy Walden, head of mortgage and housing market research at ICE. “These early signs of stress highlight the importance of monitoring borrower-level risk as market conditions evolve.”