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.
August 2022 Rate Lock Data
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. 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.
Figure 1: Lock volume for August 2022 broken out by transaction type
MCT supports more lenders with hedging and pipeline management solutions than any other single provider. MCT’s privileged position allows it 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 its national footprint.
Figure 2: Year-over-year indexed total lock volume
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 data is also broken out by transaction type: purchase, rate/term refinance, and cash out refinance.
Figure 3: Index values to end August as a percentage benchmarked to the start of the month
Figure 4: Index values year-over-year
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.
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.
