Mortgage purchase locks fell 1% month-over-month and 8% year-over-year in June, according to Optimal Blue.
That’s following a 4% year-over-year drop in purchase locks in May.
The 30-year conforming rate bottomed out on June 13 at 6.810% before ending the month at 6.938%, 8 bps lower than the close of May, the secondary marketing software firm says in its latest Market Advantage mortgage data report.
The retreat in mortgage rates prompted a 39% month-over-month increase in rate-and-term refinance volume.
Total refi volume was up 22% compared with the previous month.
Meanwhile, home prices dropped for the first time in 2024. The average home purchase price ended its five-month growth streak, dropping to $478,800 in June, down from $480,300 in May.
The average loan amount decreased by $300 to $374,200.
“Despite an improvement in interest rates, purchase activity was subdued in June,” says Brennan O’Connell, director of data solutions at Optimal Blue. “However, many homeowners with higher rates – particularly those who closed on their mortgage in the last 12 to 18 months – jumped at the opportunity to refinance, even for a small reduction in monthly payments. This behavior speaks to the ongoing inventory and affordability challenges consumers are experiencing.”
“As we look toward the back half of 2024 and the potential for rate relief from the Fed, purchase lock counts will provide insight into if and when production will turn the corner,” O’Connell adds.
The average credit score in June was 738, but it varied widely among the top 20 metropolitan statistical areas by lock volume. The San Francisco-Oakland-Hayward area had the highest average credit score at 757, while Atlanta-Sandy Springs-Roswell, Ga., area had the lowest.
Photo: Artem Beliaikin