Mortgage lock volume fell slightly in January (-0.12%) from the month before, according to Mortgage Capital Trading, Inc.’s (MCT) latest data, which covers the period from Jan. 2 to Jan. 31, 2025.
Locks for purchase loans rose 2.6% from the month prior, but were mostly flat (-0.23%) on a yearly basis after rising 22% in December 2024 compared to December 2023.
Rate/term refinance locks declined 26.91% and cash-out refinance locks declined 2.8% from December. They rose 15.37% and 11.89% respectively on an annual basis.
“Despite the drop in refinance volume, purchase volume has remained steady, resulting in relatively no change in overall production volume month-over-month,” MCT stated in a release. "The stability in purchase volume continues to support market activity while the industry awaits potential shifts in interest rates.”
Recent mortgage application data from the Mortgage Bankers Association (MBA) shows subdued purchase application volumes amidst enduring affordability pressures and elevated mortgage rates.
Concerning those mortgage rates, MCT pointed to potential Trump Administration tariffs and what the Federal Reserve does with rate cuts. Policymakers have telegraphed two or fewer rate cuts in 2025 as a resilient economy and strong labor markets continue to support a slower pace of easing.
“Tariffs, if or when implemented, may have an impact on inflation which will have influence over the next Fed decision,” said Andrew Rhodes, senior director and head of trading at MCT. “This, along with upcoming Nonfarm payroll and Consumer Price Index (CPI) reports, will help determine the outlook for mortgage rates heading into the spring season.”
MCT’s data showed an increase in refinance production in the latter half of January, the company noted, but the uptick “is likely attributable to the seasonal lull of the holiday period when compared to the end of December.”
Compared to the prior year, though, mortgage lock volume was up slightly, rising 1.47% overall in the first month of 2025.
