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Lock Volume Declines Again According To New MCTlive! Report

May MCTlive! Lock Volume Indices shows that overall lock volume had a stronger downturn in May, compared to the lighter downturn in April. Purchase lock activity was down 15.20% compared to April. Rate/term refinance volume was down 21.88%, and cash-out refinance volume was down 21.77%. Lock activity in total was down 15.87% in total compared to April.

In general, May had a stronger downward trend compared to April, but we should see lock activity begin to climb as the Fed decides if they’ve reached their terminal Fed funds rate and we move into the Spring. As it stands, total lock activity is down 29.09% from last year. Purchase lock activity sits 23.23% lower than at the same point last year. Rate and term refinance volume is down 41.85% from one year ago, and cash-out refinance volume is down 71.83% over that same period.

It is important to note that 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 believes its methodology (using actual loans locked vs. applications) is a more reliable metric. There is a higher likelihood of having multiple applications per funded loan, and prequals 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.

MCT Data represents a balanced cross section of several hundred lenders among retail, correspondent, wholesale, and consumer direct channels. A broad-based view of the entire market provides a more accurate picture of mortgage originations versus indices that are influenced by mega lenders. The May MCTlive! Lock Volume Indices is broken out by transaction type: purchase, rate/term refinance, and cash out refinance.