Following an uptick in January, mortgage rate lock volume decreased across the board in February, according to a report released Wednesday by Mortgage Capital Trading Inc. (MCT).
MCT, a San Diego-based provider of fully integrated capital markets services and technology, released its MCTlive! Lock Volume Indices for February 2023. The data represents a balanced cross-section of several hundred lenders among retail, correspondent, wholesale, and consumer direct channels.
According to the report:
- Overall rate lock activity fell 15% in February from January.
- Purchase lock activity was down 13% from January.
- Rate/term refinance volume was 42%, and
- Cash-out refinance volume was down 25%.
“The news may be disappointing, but as the [Federal Reserve] reaches its terminal fed funds rate for this cycle, we should see downward pressure on mortgage rates, which will only help increase origination activity,” the company said in its report.
Overall rate lock activity is also down 54% from a year earlier, MCT added.
“That is mostly due to a drop off in refinance demand, as purchase lock activity sits 41% lower than at the same point last year,” the report states. “Rate and term refinance volume is down 86% from one year ago, and cash-out refinance volume is down 87% over that same period.”
MCT added that its rate lock activity indices are based on the actual dollar volume of locked loans, not the number of applications, which it believes creates a more reliable metric.
Founded in 2001, MCT has grown from a boutique mortgage pipeline hedging firm into a provider of fully integrated capital markets services and technology. Its offerings include mortgage pipeline hedging, best execution loan sales, business intelligence and analytics, outsourced lock desk solutions, MSR valuation, hedging, and bulk sales, and an open marketplace for loan sales.
Headquartered in San Diego, MCT also has offices in Healdsburg, Calif.; Philadelphia; and Texas.
