Year-Over-Year Total Lock Volume Continues To Drop

August MCTlive! Lock Volume Indices show that year-over-year total lock volume (-53.0 percent) continues to drop, as expected, when compared to the white-hot summer of 2021. After the month-over-month rate/term refinance lock figure increased 11 percent in July due to a slight drop in mortgage rates, the index was down 46 percent in August. Total mortgage rate locks by dollar volume decreased 28.5 percent in August, with purchase locks declining 27.8 percent month-over-month and 23.4 percent from a year ago.

Also, cash-out refinances are down 5.3 percent month-over-month. From one year ago, cash-out refinance volume is down 80.0 percent, while rate/term refinance volume has dropped 95.2 percent. Please note that loan sizes were up 8.3 percent over the past year, with the average loan amount increasing from $291k to $315k.

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.

Founded in 2001, Mortgage Capital Trading, Inc. (MCT) has grown from a boutique mortgage pipeline hedging firm into a leading provider of fully integrated capital markets services and technology. MCT’s offerings include mortgage pipeline hedging, best execution loan sales, business intelligence and analytics, outsourced lock desk solutions, MSR valuation, hedging, and bulk sales, and an open marketplace for loan sales.  MCT supports independent mortgage bankers, depositories, credit unions, warehouse lenders, and correspondent investors of all sizes within its digital platform, MCTlive!