Data shows significant drop in mortgage lock volume

Despite lower rates, refinances fail to spur significant volume increase

Data shows significant drop in mortgage lock volume

Mortgage lock volume in January fell 13.7% from the previous month, according to a recent report by Mortgage Capital Trading (MCT), a mortgage hedge advisory and secondary marketing software firm.

Despite a recent decrease in mortgage rates, the expected surge in refinances has been modest, up 26.8% month over month. The increase was insufficient to boost overall mortgage volume, offset by a 15.4% decline in purchase volume.

Seasonal factors, combined with challenges in the purchase market, are seen as overshadowing the potential gains from the notable rate drop, the report stated.

According to the Mortgage Bankers Association, the average contract interest rate for the 30-year fixed-rate mortgage was down to 6.75% as of January 12. On the bright side, demand seems to be picking up.

Read more: Mortgage applications surge as buyers respond positively to rate adjustments

Refinance loan applications rose 11%, while purchase mortgage applications grew 9%. Overall, loan application volume was up 10.4%.

Phil Rasori, chief operating officer of MCT, commented on the current landscape: “Softening purchase prices, paired with a further drop in rates, could boost purchases and refinances. However, we anticipate that seasonal lows in the purchase market will persist through Q1.”

The data from MCT’s lock volume indices offers a snapshot of rate lock volume activity within the residential mortgage sector. The indices categorize this data based on different lock types, including purchase, rate/term refinance, and cash-out refinance across various lenders (varying in size, services offered, and business models).

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