Optimal Blue Report: Purchase Demand Holds Firm as April Lock Activity Cools
(Image courtesy of Curtis Adams/pexels.com)
Mortgage lock activity pulled back in April after a strong first quarter, according to Optimal Blue’s latest Market Advantage mortgage data report.
Total rate-lock volume declined 9% month over month–but remained 11% higher year over year, the report said. Purchase lock volume declined just under 2% from March but increased more than 9% from April 2025, continuing to lead production as refinance activity cooled. Rate-and-term refinance volume fell nearly 38% month over month but remained more than 22% higher year over year, while cash-out refinance volume declined 12% month over month but was up 11% year over year. Refinance share slipped to 23% of total volume, down from March but still above year-ago levels.
Mortgage rates remained elevated throughout April but finished slightly lower by month-end. The Optimal Blue Mortgage Market Indices 30-year conforming fixed rate, the benchmark for CME Group’s Mortgage Rate futures, ended the month at 6.31%, down 4 basis points month over month. The 10-year Treasury yield finished April at 4.40%, up 10 basis points month over month, while the spread between the 10-year Treasury and the 30-year mortgage rate narrowed to 191 basis points as mortgages outperformed.
“April looks more like a cooling from a strong first quarter than a real weakening in borrower demand,” said Mike Vough, senior vice president of corporate strategy at Optimal Blue. “Purchase activity held up well despite rate pressure, while refinance volume reacted more quickly to recent rate moves. That split reinforces how rate-sensitive borrowers remain, even as the spring purchase market continues to show resilience.”
On the secondary side, April data pointed to renewed movement toward agency mortgage-backed securities execution. Agency MBS sales increased while bulk loan sales declined, and mortgage servicing rights values rose as higher rates reduced expected refinance activity. Investor participation also increased after holding steady for three consecutive months.
“In a higher-rate environment, lenders are paying close attention to where execution value is showing up,” Vough added. “The move toward agency MBS execution, combined with higher MSR values and increased investor participation, continues to prove that lenders need to evaluate all potential execution options to maximize profitability.”
Key findings from the Market Advantage report, which Optimal Blue derived from direct-source mortgage lock and secondary market data, include:
Refi activity cools: Rate-and-term refinance volume fell nearly 38% month over month but remained more than 22% higher year over year, while cash-out refinance volume declined 12% month over month but rose 11% year over year. Refinance share slipped to 23% of total volume.
Purchase activity holds steady: Purchase lock volume declined just under 2% month over month but increased more than 9% year over year, continuing to lead overall production.
Conforming share drops below 50%: Conforming share fell just below 50% of total lock volume in April for the first time since Optimal Blue began tracking this metric. FHA share rose to 19%, VA increased to 13%, non-conforming declined to 17% and USDA held steady at 1%.
Non-QM share remains elevated: Non-qualified mortgages accounted for 9% of total lock volume in April, up 30 basis points month over month and 233 basis points year over year, with investor and bank-statement products leading expanded-guideline activity.
ARM levels remain elevated: Adjustable-rate mortgages accounted for 10% of total production, down 182 basis points month over month but broadly in line with year-ago levels and well above pre-2022 norms.
Property mix shifts: Single-family homes represented 64% of production, while planned unit developments, a proxy for new construction activity, declined to 28%, down 42 basis points month over month and 326 basis points year over year. Condo share also declined to 6%.
