Mortgage lock volumes pulled back in June,
Rate locks finished 7.84% lower compared to May, Mortgage Capital Trading said in its latest report. On a year-over-year basis, though, volumes increased by 6.11%.
Among loan categories, purchase locks fell 8.99%. On the other hand, the refinance market saw an 11.56% jump in rate-and-term transactions, but cash-outs inched down 0.36% between May and June.
The latest reading comes after lock volume rose by 6.78% the previous month, with every loan type posting increases, after interest rates hit a 2024 high in early May, then slid downward.
The June decline in activity occurred as the 30-year fixed rate hovered near 7% throughout the month, displaying less volatility than shown earlier this year. Typical seasonal patterns also contributed to the decline, with purchase momentum slowing after the initial surge in spring home buying seen every year, MCT said.
But June's reversal continues to show the effects of persistent market headwinds as well and suggests "a continuing stalemate between limited housing supply and higher interest rates."
Although last month's interest rates were, on average, lower than May's levels, they ran higher than what the typical homeowner holds today,
Limited interest among homeowners to list their properties and take on higher-rate loans, in combination
"Market supply likely peaked at the start of summer, and with rates remaining steady, significant changes in volume are not expected in the near term," the report said.
Lending momentum is likely to pick up when the Federal Reserve makes its
Should they continue to point to a slowing economy, "we could see one or two rate cuts by the end of the year," said Andrew Rhodes, senior director and head of trading at MCT, in a press release.
June's Consumer Price Index data is scheduled to be released on Thursday, July 11.
