As the leader in capital markets software and services, MCT supports more lenders with hedging and pipeline management solutions than any other single provider. This privileged position allows us to aggregate and analyze a meaningful population of data and translate it into macro trends and insights.
MCT-collected statistics are unique to the industry given the diversity of lenders (e.g., sizes, products/services offered, business models) across our national footprint.
MCT’s rate lock activity indices are based on actual locked loans, not applications, and are therefore a more accurate indication of industry lock activity than other potential stats. Especially in a tight purchase market, we firmly believe our methodology of using actual loans locked (rather than applications) is a more reliable metric. Why? There is a higher likelihood of having multiple applications per funded loan, and pre-qualifications 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.
As mentioned, our stats represent a broad and balanced cross section of several hundred lenders across retail, correspondent, wholesale, and consumer direct channels. The lock volume indices break out data by transaction type (purchase, rate/term refinance, and cash out refinance), and the below charts also include year-over-year breakdown of rate lock activity.
March 2023 Rate Lock Data
March MCTlive! Lock Volume Indices show that after a downward trend in February, lock volume increased across the board for the month. Purchase lock activity was up 23% compared to February, rate/term refinance volume was up 39%, and cash-out refinance volume was up 28%. Lock activity in total was up 24% versus February.
The fall of Silicon Valley Bank and the expectation of the Fed to ease rate hikes resulted in a modest drop in mortgage rates in March. As the Fed reaches for its terminal Fed funds rate and we begin moving into the spring, we should see the affect on purchase activity. As it stands, total lock activity is still down 32% from a year ago. That is primarily due to a drop off in refinance demand, as purchase lock activity sits 21% lower than at the same point last year. Rate and term refinance volume is down 63% from one year ago, and cash-out refinance volume is down 75% over that same period.
Figure 1: Lock volume for March 2023 broken out by transaction type
Figure 2: Year-over-year indexed total lock volume
Figure 3: Index values to end March as a percentage benchmarked to the start of the month
Figure 4: Index values year-over-year
About MCT
Founded in 2001, Mortgage Capital Trading, Inc. (MCT) has grown from a boutique mortgage pipeline hedging firm into the industry’s 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 the world’s first, truly open marketplace for loan sales. MCT supports independent mortgage bankers, depositories, credit unions, warehouse lenders, and correspondent investors of all sizes within its award-winning digital platform, MCTlive!. Headquartered in sunny San Diego, MCT also has offices in Healdsburg, CA, Philadelphia, PA and Texas. For more information, visit https://mct-trading.com/ or call (619) 543-5111.
- Growing for Your Needs – Since 2001, MCT has grown from a pipeline hedging services specialist into a fully integrated provider of capital markets services & software.
- Capital Markets Expertise – Through a combination of unparalleled industry experience and relentless focus on data, MCT is pioneering the future of capital markets technology. From MCTlive!, to MSRlive!, to our award-winning Bid Auction Manager (BAM) – MCT pushes the envelope to exceed client expectations.
- Clients & Employees Agree – MCT delivers unparalleled customer service and prides itself on being a regular winner of San Diego’s “Best Place To Work” Award.
