Refinance Activity Boosts Rate Lock Volume

Total mortgage volume remains relatively flat, despite the fact that rate lock volume increased 3.33% in August from July.

Capital markets technology provider Mortgage Capital Trading, Inc. (MCT) released its latest Lock Volume Indices, which revealed a 103.19% month-over-month increase in refinance activity that was triggered by a recent quarter-point drop in conventional 30-year and government 30-year mortgage rates.

This uptick in refis in the latter part of the year has helped stabilize lenders’ overall production, especially when compared to 2020 and 2021. Total volume – refis included – increased 21% year-over-year.

Industry experts, including MCT Senior Director and Head of Trading Andrew Rhodes, suggest that many lenders may be pricing in the potential rate cuts expected during the upcoming Federal Reserve meeting.

“We could see additional short-term market volatility as the Fed considers a 25 or 50 basis point rate cut,” Rhodes said. “Friday’s Nonfarm Payroll Report will provide further clarity on that decision."