(SAN DIEGO, Calif.) — NEWS: MCT®, the leader in capital markets software and services supporting more lenders with hedging and pipeline management solutions than any other single provider, is pleased to present the MCTlive! Lock Volume Indices for May 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 May MCTlive! Lock Volume Indices is broken out by transaction type: purchase, rate/term refinance, and cash out refinance.
May MCTlive! Lock Volume Indices, which include an adjustment for the Memorial Day Holiday, show that that total mortgage rate locks by dollar volume decreased 10.6 percent in May, and total lock volume is down 29.5 percent from a year ago as purchases now make up most of the volume. Rapid rises in rates have kept would-be borrowers on the sidelines in 2022, and we saw declines in all three lock categories.
Purchase locks are now on the decline, down 1.78 percent month-over-month and 10.1 percent from a year ago. The increase in mortgage rates is also evident as refinance volume continues to fall. Rate/term refinances are down 29.6 percent and cash out refinances are down 9.0 percent month-over-month. From one year ago, cash out refinance volume is down 57.5 percent, while rate/term refinance volume has dropped 90.0 percent. Given rate/term refinance volume was already down 88 percent year-over-year in the April MCTlive! Lock Volume Indices, this month’s drop does not change the total much.
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.
INDEX VALUES TO END MAY AS A PERCENTAGE BENCHMARKED TO THE START OF THE MONTH
Category | Month-Over-Month Index Value Change
Rate/Term Refinance: -29.57%
Cash Out Refinance: -8.99%
INDEX VALUE CHANGE YEAR-OVER-YEAR
Category | Year-Over-Year Index Value Change
Rate/Term Refinance: -90.03%
Cash Out Refinance: -57.52%
MCT will be publishing the MCTlive! Mortgage Lock Volume Indices monthly, intending the data to serve as an enduring informational tool for industry participants, analysts, and watchers.
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.
Related link: https://mct-trading.com/
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