ICE Mortgage Technology, neutral provider of a robust end-to-end mortgage platform and part of Intercontinental Exchange, Inc. (NYSE: ICE), today released its October 2025 ICE Mortgage Monitor Report. ICE data reveals that home affordability has reached its best level in 2.5 years, driven by easing mortgage rates.
“The recent pullback in rates has created a tailwind for both homebuyers and existing borrowers,” said Andy Walden, Head of Mortgage and Housing Market Research at ICE. “We’re seeing affordability at a 2.5-year high, which is beginning to bolster purchase demand, while creating more opportunities for homeowners to lower their monthly payments with a rate-and-term refinance loan.”
Key findings from the October Mortgage Monitor include:
- Affordability reaches best level since early 2023
With 30-year mortgage rates averaging 6.26% in mid-September, the monthly principal and interest (P&I) payment on an average-priced home has fallen to $2,148, or 30% of the median U.S. household income. Though still more than five percentage points above its long-run average, P&I costs have declined from 32% earlier this summer and significantly improved from their 35% peak in late 2023.
While roughly a dozen of the nation’s 100 largest housing markets — primarily in the Midwest — are near long-term average affordability levels, coastal markets remain significantly stretched. For example, in Los Angeles, 62% of the median income is required to afford an average-priced home, underscoring the disparity in markets.
- Home prices firm as affordability improves and inventory tightens
Annual home price growth rose to +1.2% in September after eight months of slowing, driven by falling inventory and improved affordability. Nationally, listings remain 17–19% below 2017–2019 norms, as sellers in previously oversupplied markets delay sales to avoid price cuts.
The Northeast and Midwest lead in annual price gains, fueled by low inventory and stronger affordability. In September, 80% of markets saw price increases — the highest share in nine months — while only 20% declined, down from 55% two months ago. Still, nearly half of major markets remain below recent peaks, with 25% over 2% off and 10% more than 5% below their highs.
- Borrower profiles reflect improved financial stability
The average credit score for purchase locks has climbed above 736, the highest recorded in the six-year history of ICE’s origination dataset, indicating a shift toward a more credit-qualified borrower mix. At the same time, debt-to-income (DTI) ratios for purchase rate locks have dropped to 38.5%, marking their lowest level in 2.5 years as affordability continues to improve. For rate-and-term refinances, the average DTI has fallen to 34.1%, a 3.5-year low, while the average credit score has risen to 722, a nine-month high.
“As affordability improves and homeowners gain the ability to refinance, lenders and servicers need to be ready to act quickly,” said Tim Bowler, President of ICE Mortgage Technology. “Our integrated MSP® servicing and Encompass® loan origination systems, combined with robust data and analytics, enable our customers to identify and engage borrowers at the right moment — whether they’re looking to purchase, refinance or tap into their equity. By leveraging ICE’s technology, our clients can deliver a modern experience and capture opportunities as market dynamics shift.”
The full October Mortgage Monitor report contains a deeper analysis of August mortgage payment performance, mortgage origination trends, and housing market trends featuring September ICE Home Price Index (HPI) data.
Further detail, including charts, can be found in this month’s Mortgage Monitor report.
