Second-lien lending hit its highest first-quarter volume in 18 years as homeowners withdrew equity at the strongest first-quarter levels since 2021, according to a report released Monday by ICE Mortgage Technology.

Andy Walden, head of mortgage and housing market research at ICE, said the housing market “continues to be defined by the lock-in effect,” where homeowners who took advantage of low rates during the 2020-21 pandemic are opting to keep their existing rates rather than refinance to a higher-rate loan.

“Millions of homeowners are sitting on first mortgages with rates well below current market levels, making second liens and HELOCs an attractive way to access equity without giving up those loans,” Walden stated in an email with the report. “While higher mortgage rates have reduced refinance opportunities and softened affordability gains in recent months, home prices continue to firm across much of the country and affordability remains improved from year-ago levels.”

ICE reported that equity withdrawals rose 2% year over year to start the year — with second liens accounting for 54% of equity extraction. Cash-out refis saw their highest first-quarter level since 2022.

While the volume has continued to increase, “the pace of growth in equity withdrawals has clearly slowed alongside home price appreciation and equity gains in recent quarters,” the report stated, noting the 2% first-quarter increase from 2025 was the slowest such growth rate in eight quarters.

ICE estimates $47 billion in equity was withdrawn during the first quarter. This is “down from $49 billion in the fourth quarter of 2025 but up from $46 billion in the first quarter of 2025.”

The report also pointed to an 18% year-over-year increase in completed cash-out refinances during the quarter, estimating 234,000 borrowers withdrew a total of $22 billion. That’s a 2% increase from a year ago, averaging a $93,000 withdrawal per borrower.

“Another 248,000 borrowers withdrew equity by adding a second lien, withdrawing $25 billion through such transactions — up a modest 1% from the first quarter of 2025,” the report stated.