MCT: Mortgage Lock Activity Dips

Mortgage lock volume dipped across most segments in October even as markets began adjusting to shifting Federal Reserve expectations late in the month, according to Mortgage Capital Trading, San Diego.

According to MCT’s data, total lock volume decreased 1.3% month over month in October, led by a 2.86% drop in purchase locks and a 0.31% dip in rate/term refinances. Cash-out refinances rose 7.41%, representing the only category with positive monthly growth.

“On a year-over-year basis, the story remains one of resilience,” the report said. Total volume is up 15.34%, driven by a 103.37% increase in rate/term refinance activity and 33.76% growth in cash-out refinances, while purchase locks held nearly flat at 0.14%.

MCT Head of Trading Andrew Rhodes explained that the market had already priced in a second 25-basis-point cut before Federal Reserve Chairman Powell’s October 28 announcement, when Powell said a December cut was “not a foregone conclusion.”

The recently resolved government shutdown–the longest one on record–delayed the critical economic reports the Fed relies on, including employment, inflation and GDP growth. Rhodes cautioned that the data may not reach policymakers in time for the December meeting.

Looking ahead, Rhodes said he expects seasonal patterns to continue through year-end, but with improving conditions as rates stabilize and refinance activity normalizes.

“My expectation going into Q4 was another 25-basis-point cut in December,” he said. “Now that looks less certain, but regardless, I think we’re set up for a better winter than we’ve seen in several years.”

He added that if the Fed holds rates steady in December, a January or early-2026 cut could maintain the market’s easing trajectory.

“Even if the next move doesn’t come until early next year, we’re trending toward lower rates overall,” Rhodes said. “That creates opportunity heading into spring.”