Lower mortgage rates in September resulted in a surge in both refinance and purchase locks, driving total volume up 28% compared with August, according to Optimal Blue’s latest Market Advantage mortgage data report.
The drop in mortgage rates that came during the month resulted in the biggest refi wave since early 2022, the secondary marketing software firm says.
Refi share increased to 39% of all locks, driven by a 153% month-over-month increase in rate-and-term refinances and a 13% gain in cash-outs.
Purchase locks increased 6% compared with August and were up 9% compared with September 2024, outperforming typical late-season expectations.
“The rate rally that began in late summer accelerated in September, and borrowers reacted quickly,” says Mike Vough, head of corporate strategy at Optimal Blue, in the report. “Rate-and-term refinance locks jumped 153 percent month over month, lifting total refi share to 39 percent – the highest level we’ve seen in more than two years. That momentum also spilled into purchase lending as affordability improved, particularly for first-time homebuyers.”
There were also notable movements in capital markets execution: Sales to the agency cash window and aggregators each fell 100 bps to 23% and 32% respectively, while agency mortgage-backed security (MBS) executions increased to 42% from 40%, reflecting stronger securitization activity among large lenders.
The share of loans sold at the highest pricing tier climbed to 78%, up 300 bps, suggesting less focus on delivery profiles and fewer eligibility exceptions influenced pricing decisions, the firm says.
“This combination of stronger pricing and greater securitization participation underscores lenders’ efforts to optimize execution as volume rebounds while maintaining profitability,” Vough says. “Even as MSR values edged down 6 bps in September, nearly eight in ten loans were sold at the highest pricing tier, showing how lenders are offsetting that compression through broader investor engagement.”
The report shows that pull-through rate for purchases increased 58 bps to 83.6% while the pull-through rate for refinances increased 82 bps to 60.2%.
The average loan amount for September was $403,746, up from $386,387 in August and $382,476 in July. September averages ranged from $605,542 in metro New York to $305,829 in Indianapolis. Average LTVs ranged from 73.57 in New York to 82.22 in Indianapolis.
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