Year-Over-Year Lock Volume Continues To Drop
December MCTlive! Lock Volume Indices show that year-over-year total lock volume (-67.5 percent) continues to drop, as expected, when compared to activity in 2021. Both the month-over-month rate/term refinance lock figure and purchase index decreased for the third consecutive month. Total mortgage rate locks by dollar volume decreased 19.8 percent month-over-month in December.
Cash out refinances are down 23.5 percent month-over-month and from one year ago volume is down 90.0 percent, while rate/term refinance volume has dropped 93.3 percent from 2021. Please note that loan sizes were up more than 8 percent over the past year, with the average loan amount increasing from to $320k.
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.
Mortgage Capital Trading, Inc. (MCT®), a provider of capital markets software and services supporting lenders with hedging and pipeline management solutions, presented the MCTlive! Lock Volume Indices for December 2022. 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 December MCTlive! Lock Volume Indices is broken out by transaction type: purchase, rate/term refinance, and cash out refinance.
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