Headwinds from a seasonal decline in purchase activity and rising interest rates led to a 20% decline in rate lock volumes in September compared with August, according to Optimal Blue’s Originations Market Monitor.
The refinance share of total lock volume ticked slightly higher from 12% to 13%, primarily as a result of seasonal purchase declines.
Cash-out volumes continue to make up the majority of refinances, at roughly double that of rate/term volumes, with virtually no mortgages in the money to refinance.
September’s lock decline continues a four-month trend of declining volumes, with purchase locks down 20%, cash-outs down 17%, and rate/term refinances down 18% from August.
Total volumes were down 33% from the same time last year. Additionally, purchase lock counts – which exclude the impact of rising home prices – were down 32% year over year, and 39% from pre-pandemic levels in 2019.
Mortgage rates also pushed to multi-decade highs in September, and average credit scores remained high.
In producing the Originations Market Monitor, Optimal Blue aggregates and reports the latest available monthly rate lock data drawn from the Optimal Blue PPE.
Each month, the report reviews a series of key market indicators to help provide clarity on mortgage lending activity.
Photo: Georg Bommeli