Mortgage rate lock volume increased 15.36% during March, according to Mortgage Capital Trading (MCT), a provider of mortgage capital markets technology.
The increase comes despite the headwinds of rising home prices, lack of inventory and higher mortgage rates.
Although rates currently stand at around 7%, historically high compared to recent years, they are expected to decline, enticing buyers to make purchases now with the anticipation of refinancing when rates begin to drop, the firm says in its report.
While the recent months have witnessed a steady rise in lock volume, it’s important to note that volumes remain on the lower end of the scale, resulting in perceived significant month-over-month increases. The lock volume indices reveal an 8% year-over-year increase, predominantly fueled by a 44% surge in refinances compared to this time last year.
“Even amidst the challenges posed by higher rates, we continue to witness incremental increases in lock volume,” says Andrew Rhodes, senior director and head of trading at MCT, in a statement. “Market expectations indicate a 50% chance for a rate cut in June. However, robust economic data in the coming months may delay rate cuts until July or September, potentially resulting in sideways or even lower production.”