Mortgage lock volume increased 3.17% in September compared with August, driven mainly by a surge in refinance activity that resulted from the Fed’s rate cut, as shown by Mortgage Capital Trading’s (MCT) monthly report.
August and September have seen a continued slowdown in purchase lock volume, as is typical following the summer buying season, MCT says in its report.
However, refinance activity has shown a steady increase, strong enough to offset the usual decline in overall lock volume from August to September.
This increase in refinance activity has contributed to maintaining total lock volume production, the firm says.
“This data signals a potential shift in strategy for loan officers, who are increasingly targeting borrowers looking to refinance after securing mortgages at higher peak rates,” says Andrew Rhodes, senior director and head of trading at MCT. “However, for a more significant rise in refinance activity, mortgage rates will need to drop much further. Currently, many borrowers remain locked into historically low rates, making the potential for increased refinance volume contingent on further rate reductions outside of market expectations.”
Rhodes also pointed to the significance of upcoming economic indicators.
“With the expected Fed rate cuts already factored in, the market is now turning its attention to Friday’s nonfarm payroll report and the next Consumer Price Index release for signs of where rates are headed,” he says.
Photo: Artem Beliaikin