MCT says purchase locks held steady as refinances fell in May

Mortgage Capital Trading released its June Lock Volume Indices on June 9, showing steady purchase activity in May even as rate/term refinances dropped sharply. The report points to summer demand, Fed uncertainty and broader market volatility as the key forces shaping mortgage lock volume.

Why it matters: - Purchase locks are still carrying mortgage production heading into summer, even as refinance demand weakens. - MCT’s latest data suggests lenders are navigating a more uncertain rate environment after a sharp pullback in rate/term refinancing. - The June transition at the Federal Reserve adds another layer of uncertainty for mortgage pricing and lock strategy.

What happened: - Mortgage Capital Trading, Inc. released its June Lock Volume Indices on June 9, 2026. - The indices reflect May 2026 lock volume data from MCT’s national lender footprint. - Total lock volume fell about 2% in May. - Purchase locks remained steady. - Rate/term refinances fell nearly 25%. - Cash-out refinances declined about 5%. - Year over year, total lock volume stayed stable and above the same period in 2025.

The details: - MCT’s Lock Volume Indices break out residential mortgage lock activity by purchase, rate/term refinance and cash-out refinance. - The data spans a broad range of lenders, including different sizes, product mixes and business models. - Andrew Rhodes, MCT’s head of trading, said lenders should stay disciplined with lock policies and procedures because volatility remains ahead. - Rhodes said markets are pricing in a rate hike as the next move rather than a cut because of inflation concerns. - Rhodes said much of the repricing from a hike has already moved through the market. - Rhodes said a major turnaround in the Middle East and lower gas prices could change sentiment, but he does not expect that scenario.

Between the lines: - The drop in rate/term refinances shows how sensitive refinance demand remains to rate expectations and market swings. - Stable purchase volume suggests homebuying activity is still doing the heavy lifting for overall production. - The Fed leadership change and inflation worries appear to be keeping lenders in a defensive posture.

What's next: - MCT expects summer performance to depend on whether purchase demand holds near current levels. - Rhodes said sustaining purchases would be a “huge win” if rates remain around current levels. - MCT says it will continue providing data-driven market insights and guidance.

The bottom line: - Mortgage production looks more dependent on purchase activity than refinancing as the summer market begins.