Lenders averaged a 17 basis point profit on a pretax basis during the quarter, versus a 25 basis point loss in the first quarter and an 18 basis point loss a year ago.

"With a pickup in quarterly volume, productivity, and closings-to-applications pull-through, production costs dropped by about $1,800 per loan," Marina Walsh, the MBA's vice president of industry analysis, said in a press release. "These developments contributed to better net results, even as production revenues decreased from the previous quarter."

Total production revenue, which includes fee income, net secondary marketing income and warehouse spread, decreased to 347 basis points in the second quarter, down from 371 basis points in the first quarter.

That was not surprising given the drop in gain on sale margins during the period. Out of nine companies tracked by Boston Consulting Group that report this information, eight had lower GOS compared to the first quarter. BCG noted that lenders are starting to move towards revenue enhancement activities rather than cutting costs.

As measured in dollars, production revenues decreased to $11,499 per loan in the second quarter, down from $11,947 three months prior.

But on the other side of the financial equation, costs also fell to $10,806 per loan from $12,593 during the same time frame. That translates to 330 basis points for the most recent period from 395 basis points in the first quarter.

The purchase share for the companies in this study was 86% during the second quarter, higher than the MBA estimated industry average of 78%.

The average loan balance for first lien mortgage originations increased to $356,993 in the second quarter, from $345,761 in the first quarter.

Meanwhile, IMBs made less money on their servicing operations during the second quarter, with net financial income of $69 per loan, compared with $82 in the prior quarter and $94 for the previous year's period.

Operating income for this line, which excludes mortgage servicing rights amortization, any gains or loss in their valuation net of hedging, and gains or losses on the bulk sales, was $88 per loan in the second quarter, down from $93 for the first quarter and $105 for the second quarter of 2023.

Overall, including all business lines, 78% of the IMBs in the report posted pre-tax net financial profits in the second quarter compared with just 59% in the first three months of the year and 58% for the period ended June 30, 2023.

Noting this shift in her comments, Walsh said, "After two of the most challenging years in the mortgage business, many companies are seeing light at the end of the tunnel."