Mortgage Rate Locks Buoyed By Refis
MCT reports 3.17% increase in September
A steady rise in refinance activity has offset the usual end-of-summer decline in mortgage lock volume this year, which rose by 3.17% from August to September, Mortgage Capital Trading reported Wednesday.
Refinance transactions increased 63.59% over that time period, with cash-out refinances specifically rising by 8.3%. That slowed from July to August, when refis increased 103.19%.
Meanwhile, purchase transactions fell by 4.61% in the month of September.
On an annual basis, mortgage rate lock volume increased by 35.15%, purchases rose 15.11%, rate/term refinances rose 651.28%, and cash-out refis rose by 60.54%.
“This data signals a potential shift in strategy for loan officers, who are increasingly targeting borrowers looking to refinance after securing mortgages at higher peak rates,” said Andrew Rhodes, senior director and head of trading at MCT. “However, for a more significant rise in refinance activity, mortgage rates will need to drop much further. Currently, many borrowers remain locked into historically low rates, making the potential for increased refinance volume contingent on further rate reductions outside of market expectations.”
Rhodes also pointed to the significance of upcoming economic indicators and inflationary data.
“With the expected Fed rate cuts already factored in, the market is now turning its attention to Friday’s Nonfarm Payroll report and the next Consumer Price Index release for signs of where rates are headed,” he added.
The Consumer Price Index (CPI) for September 2024 is scheduled to be released next Thursday, October 10 at 8:30 a.m. (ET) by the U.S. Bureau of Labor Statistics.