Mortgage lock volume dropped 13.29% in September, as rates and home prices both continued to rise, according to Mortgage Capital Trading, a mortgage hedge advisory and secondary marketing software firm.
This is a significant decrease compared with August’s month-over-month drop of 4.76%.
This downward trend in mortgage lock volume is attributed to an increase in mortgage rates throughout the last month to high sixes and low sevens as the primary culprit, and lack of supply and unattractive housing values being secondary reasons, the firm says.
“We are hopeful that we will get some better sentiment from the Fed in either its November or December meeting which would allow for some relief for rates,” says Andrew Rhodes, senior director, head of trading at MCT, in a statement. “But without that, high-interest rates will continue to be the prevailing force weighing on the market.”
Eyes in the coming winter months will be on any shift in CPI and nonfarm payroll, two indicators the Fed will look to as it makes its decisions for the rest of the winter and into Q1.
“As long as those numbers continue to stay strong or in line with the consensus, I believe the rates are going to stay where they are,” Rhodes says. “If we see a strong shift in either direction for CPI or non-farm payroll, that could mean we will either see an increase in rates or we will get more verbiage on pausing and it being close to terminal.”