MCT: Rate/Term Refinances Pull Back; Purchase Locks Hold Heading into Summer

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Mortgage Capital Trading, San Diego, reported total lock volume declined about 2% in May; purchase locks remained steady, and rate/term refinances pulled back nearly 25%; cash-out refinances softened about 5%.

On a year-over-year basis, total lock volume remained stable compared to the same period in 2025, MCT’s June Lock Volume Indices report said.

“The industry should just continue to bunker down and shield themselves, staying disciplined with lock policies and procedures,” said Andrew Rhodes, head of trading at MCT. “A lot of volatility is still ahead of us.”

Rhodes noted the transition at the top of the Federal Reserve is a key piece of that volatility. Kevin Warsh was sworn in as Chairman of the Federal Reserve in May, succeeding former Chairman Jerome Powell. “We think the commentary is going to be consistent with the rhetoric from Powell, waiting to see what the data looks like,” Rhodes added. “Markets are pricing in a rate hike as the next move rather than a cut given the inflation concerns.”

According to Rhodes, much of that repricing from a hike has already moved through the market. “A lot of the rate hike is already priced in,” he said. “If there’s a major turnaround in the Middle East and gas prices come down, the whole sentiment changes. That’s where you’d see a big reversal. But I don’t necessarily see that coming. I see more uncertainty and continued turmoil.”