November Mortgage Lock Volume Drops By 10.7%: MCT Indices Report

The Mortgage Capital Trading (MCT) Indices Report for December reported a significant 10.7% drop in mortgage lock volume in November compared to the previous month. This decline, though not unexpected during the holiday season, highlights some interesting trends within the mortgage market.

The report indicates a slight increase in lock volume early in November. This uptick was attributed to a marginal drop in mortgage rates and heightened activity stemming from a rally in Mortgage-Backed Securities (MBS). However, this surge proved to be short-lived, as the volume plateaued and subsequently decreased as the month progressed. The Thanksgiving holiday was identified as a contributing factor to this decline.

Andrew Rhodes, senior director and head of Trading at MCT, said, "while we’ve seen a decrease in mortgage rates from the highs which would alleviate the seasonal dip, we are still struggling with low supply and see that as a continued trend through the beginning of 2024."

One key factor in the current landscape is the Federal Reserve's recent indication that the terminal federal funds rate may have been reached. This announcement has generated hope within the mortgage industry, as it could potentially stabilize mortgage rates.

The challenges posed by limited housing supply have been a consistent theme in the mortgage market, affecting both homebuyers and industry professionals alike. As the market navigates these complexities, industry experts are closely monitoring various indicators, including mortgage rates and federal policy shifts.