Rate Lock Volume Continues To Drop

Mortgage lock volumes continue to drop when compared to the summer of 2021, according to MCT.

The company found that overall lock volumes were down 48.5% year-over-year. However, both the month-over-month rate/term refinance locks were up 33% and the purchase index was up 6.3% in September. 

Total mortgage rate locks by dollar volume fell 5.4% month-over-month in September. Cash out refinances are down 10.7% month-over-month and from one year ago volume is down 80.6%, while rate/term refinance volume dropped 92.9% from 2021. Loan sizes were up 8.3% over the past year, with the average loan amount increasing $292,000 to $31,000. 

MCT, provider of capital markets software and services, said it represents a balanced cross section of several hundred lenders among retail, correspondent, wholesale, and consumer direct channels. The Lock Volume Indices is broken out by transaction type: purchase, rate/term refinance, and cash out refinance.

MCT’s rate lock activity indices are based on actual dollar volume of locked loans, not number of applications. Especially in a tight purchase market, MCT relieves its methodology of using actual loans locked versus applications as a more reliable metric. There is a higher likelihood of having multiple applications per funded loan, and prequels do not convert at as high of a rate in the current market as has historically been the case — especially when applications are counted at the early stage of entering a property address.