MCT Finds Refinance Slowdown as Geopolitical Uncertainty Persists

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Mortgage Capital Trading, San Diego, said April lock volume reflects a market defined by rate-driven constraints and unresolved geopolitical uncertainty.

Total lock volume declined 12.5% month over month in April, MCT’s Lock Volume Indices report said. Rate/term refinance volume fell 58.4%, cash-out refinances pulled back 17.2% and purchase locks increasing 1%.

On a year-over-year basis, total volume gained 2% as rate/term refinances rose 12.9%, cash-out refinances were up 5.6% and purchase locks remained relatively flat.

“The data is consistent with what the mortgage industry saw in April,” noted Andrew Rhodes, senior director of capital markets at MCT. “There’s been a drop-off in overall production.”

Rhodes pointed to the ongoing geopolitical conflict as the dominant force shaping rate sentiment heading into spring.

“Geopolitical conflict is the biggest component driving market movement right now,” he said. “There’s still considerable volatility surrounding the situation, and until that stabilizes, the other data points remain secondary.”

The Federal Reserve held its benchmark rate steady at its April 29 meeting for the third consecutive time, but the 8-to-4 vote produced the most dissents since 1992. Rhodes noted that the Fed is likely to remain “cautious” until additional economic data emerges and geopolitical tensions stabilize.

The approaching leadership transition at the Fed adds another layer of uncertainty. But Rhodes said he is hopeful that leadership will remain independent and make decisions based on data. “At the end of the day, it’s a committee. Decisions are ultimately driven by committee consensus, not any single individual,” he said.

MCT said purchase activity showed resilience even as broader volume contracted during what are typically the strongest weeks of the spring buying season, though affordability pressures continue to limit purchase production in some markets. “Home affordability is going to continue to be an issue,” Rhodes said. “Certain markets are just pricing out individuals, and there’s no real way to get them back into the market without improved labor markets.”

Rhodes said he expects a measured market response to the upcoming nonfarm payroll report, noting that investors remain primarily focused on broader geopolitical developments and interest rate direction. “For now, lenders continue to operate in a cautious environment defined by elevated rates, affordability pressures, and persistent geopolitical uncertainty,” he said.