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Optimal Blue Report: Surge In Mortgage Activity Marks Start Of 2024

Feb 12, 2024
mortgage originations
News Director

January originations report reveals promising trends with increased lock volume, rate relief, and market stabilization indicators.

The year started out with an increase in mortgage activity, according to Optimal Blue's Originations Market Monitor report. 

“The new year kicked off with continued rate relief and a 36% month-over-month gain in total lock volume, driven by a seasonal 38% increase in purchase lock volume,” said Brennan O’Connell, director of data solutions, Optimal Blue. “We also saw the smallest year-over-year decline in purchase lock counts since May 2022, which may foreshadow a stabilizing market and friendlier lending environment in 2024.”

The report highlights significant increases in cash-out and rate/term refinance volumes, rising by 30% and 20%, respectively. Moreover, the Optimal Blue Mortgage Market Indices (OBMMI) revealed a drop of four basis points in the 30-year conforming rate, settling at 6.53% by the end of January, despite a mid-month peak at 6.7%. Conversely, jumbo rates experienced an 11-basis point increase since the end of the previous year.

Mortgage rates decreased despite a 15-basis point rise in the 10-year Treasury yield, leading to a 19-basis point narrowing of the mortgage-to-Treasury spread, which reached levels unseen since mid-2022. This narrowing trend is notable, especially considering the spread had surpassed 300 basis points multiple times in 2023.

Conforming products gained market share in January, representing 57.3% of total volume, while non-conforming products, including jumbo and non-QM, accounted for 9.7% of total volume. The report also highlighted shifts in the shares of Ginnie Mae-eligible products, with FHA and VA shares decreasing while adjustable-rate mortgage (ARM) products remained consistent.

The report pointed out an increase in average credit scores across all products and loan purposes, along with a rise in the average loan amount from $349,500 to $355,600. After six consecutive months of decline, the average home purchase price rebounded, jumping from $435,900 to $444,900.

About the author
Christine Stuart is the news director at NMP.
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