Total mortgage lock volume fell 4.2% in October compared with September but remains at the second-highest level in three years, according to Optimal Blue’s latest Mortgage Market report.
Year-over-year, total lock volume increased 18%.
Purchase locks decreased 1.5% compared with September.
Rate-and-term refinances fell 14% compared with September but were up 143% year-over-year.
Cash-out refis increased 6% compared with September and were up 29% compared with a year earlier.
Refinances accounted for 37% of all production in October, down 176 bps from September but up 11.4 points compared with October 2024.
“October’s data speaks to the market’s resilience,” says Mike Vough, head of corporate strategy at Optimal Blue, in a statement. “Purchase activity held steady and refinance demand – particularly cash-outs – remained strong. Even after September’s record pace, October delivered another standout month for originations.”
Lenders continued to strengthen execution strategies in the secondary market during October, according to the report. Sales to agency mortgage-backed securities (MBS) climbed 400 bps to 46%, extending a multi-month trend of large-lender securitization growth. Deliveries to the agency cash window fell 200 bps to 30%, while aggregator bulk and best-efforts channels each dipped 100 bps.
The share of loans sold at the highest price tier rose to 81%, up 300 bps, underscoring lenders’ ability to capture premium pricing even as servicing values tightened.
Mortgage servicing rights (MSRs) for conforming 30-year loans increased 3 bps to 1.12% (a 4.47 multiple), moving in line with an average 6-bps gain across OBMMI rates for the month.
“October’s secondary market data reflected clear strength in execution,” says Vough. “Lenders leaned further into MBS sales and maintained access to top-tier pricing, signaling disciplined hedging and growing investor confidence. With securitization share and pricing quality both on the rise, large lenders appear well positioned to sustain profitability as production remains steady.”
Photo: The Blowup