Mortgage Purchase Lock Counts See First YoY Gain Since Fed Rate Hikes Began Two Years Ago

Optimal Blue released its April 2024 Originations Market Monitor report, which reveals the first year-over-year increase in purchase mortgage lock counts since the Federal Reserve initiated rate hikes in March 2022.

“Purchase lock counts are a key market indicator as they control for changes in home prices and more volatile refi activity, so the year-over-year increase in April is a particularly encouraging sign that mortgage production may be turning a corner,” said Brennan O’Connell, director of data solutions at Optimal Blue. “While we are cautiously optimistic, May figures will provide further confidence in the positive trend, as April 2024 numbers got a boost from the Easter holiday landing in March this year.”

Key findings from the April 2024 Originations Market Monitor report, which are drawn from direct-source mortgage lock data, include:

• Year-over-year lock count growth: April purchase lock counts rose 5% over April 2023, the first increase in annual lock counts in more than two years.
• Spring homebuying drove overall increase in lock volumes: Total monthly rate lock volume increased by 8.7% in April, driven by an 11.0% month-over-month increase in purchase lock volume.
• Declining refinance activity: The share of refinances in total volume decreased to 12%, tying the low levels seen during the summer of 2023. Rate/term refinance volumes fell by 13.7%, and cash-out volumes remained flat.
• Rising interest rates: The benchmark Optimal Blue Mortgage Market Indices (OBMMI) observed significant increases across all categories as higher-than-anticipated inflation readings have cooled market expectations for rate cuts in 2024. The 30-year conforming fixed rate rose 51 basis points to finish the month at 7.24%. This figure is 80 basis points higher than one year ago.
• Shifts in loan type popularity: Nonconforming loan products, including jumbo and non-QM loans, increased their market share by 1.85% to 13.7%. Meanwhile, shares for conforming, FHA and VA loans declined.
• Increasing loan and home purchase prices: The average loan amount increased $7,200 to $374.5K, and the average home purchase price climbed $14,100 to $477.9K.

The full April 2024 Originations Market Monitor report provides further detail on these findings and more insights into U.S. mortgage market trends.

Each month, Optimal Blue issues the Originations Market Monitor report, which provides early insight into U.S. mortgage trends. Leveraging lender rate lock data from the Optimal Blue PPE — the mortgage industry’s most widely used product, pricing, and eligibility engine — the Originations Market Monitor provides a view of early-stage origination activity. Unlike self-reported survey data, mortgage lock data is direct-source data that accurately reflects the in-process loans in lenders’ pipelines.