Total lock volume increased 1.95% in June compared with May, driven mainly by an increase in refinances, Optimal Blue’s June Market Advantage report shows.
Rate-and-term refis jumped 17.4% and cash-outs rose 8.1%, compared with the previous month, according to the report.
Refinance share climbed from 16% to 18% of all locks.
Meanwhile, purchase activity held relatively steady – a better-than-expected result for June, when the spring homebuying season typically tapers off, the firm says.
Non-QM lending accounted for 7.4% of all June rate locks – a share that has gradually increased in recent months as lenders and borrowers explore alternative qualification paths.
“As market conditions evolve and affordability challenges persist, non-QM lending offers a path for qualifying creditworthy borrowers who may not meet qualified mortgage guidelines,” says Mike Vough, head of corporate strategy at Optimal Blue, in a statement. “The steady rise in this category reflects the industry’s growing focus on flexibility and meeting borrowers where they are.”
On the capital markets side, the aggregator share of loan sales dropped 300 basis points (bps) month-over-month to 35%, suggesting that the agencies improved pricing margins and gained market share, either via the cash window or MBS securitizations.
“Given current news headlines, the decrease in aggregator market share corresponding with the increase in agency market share is noteworthy,” Vough says. “Both loans sold to the cash window and via MBS securitization were up 2 percent month over month. This highlights the need for lenders to review multiple investors and delivery methods to squeeze the most out of their loan sales.”
Photo: The Blowup