Mortgage rate lock volume dropped 17.76% in October compared with September according to hedge advisory and secondary marketing software firm Mortgage Capital Trading (MCT).
Loan originations for October continued to dip as mortgage rates hovered around 8% and lack of housing supply continues to slow origination volume, the firm says in its latest Lock Volume Indices report.
While overall mortgage lock volume dropped more than 17% in October, cash out refinances did see a boost.
“Cash out refinances jumped more than 11 percent in October from the previous month,” says Andrew Rhodes, senior director, head of trading at MCT. “However, given that cash out refinances are already at notable lows, I don’t believe it to be statistically significant.”
This trend is expected to play out through 2023 as the Fed paused rates at their November 1 meeting and indicated the potential for another rate hike before the end of the year.
“Multiple factors such as an 8 percent mortgage rate, the Fed’s continued fight against inflation, and the industry’s cyclical winter lull, shows we’ll likely continue to see low origination volume heading into the new year,” Rhodes adds.
Photo: Georg Bommeli