December Data Shows Year-Over-Year Increases Across All Loan Types

By KIMBERLEY HAAS
New numbers show year-over-year growth in mortgage activity, offering a glimmer of hope for industry professionals as 2025 begins.
On Tuesday, Optimal Blue released its December 2024 Market Advantage mortgage data report, which shows that lock volume was up 26% YOY, driven by an 18% increase in purchase locks, a 43% rise in cash-out refinances, and an 82% jump in rate-and-term refinances.
Brennan O’Connell, director of data solutions at Optimal Blue, said these numbers illustrate how the market is adapting to shifting conditions, remaining resilient.
He pointed out that mortgage rates last month were comparable to what they were at the end of 2023 during an interview with The Mortgage Note.
“It gives me confidence that, even in this rate environment, which isn’t really much better than it was a year ago, you’re seeing an improvement in purchase lending,” O’Connell said.
Looking back on 2024 as a whole, O’Connell said in many ways, it was similar to 2023. But there was a breakthrough point in the fall when purchase lock counts started to trend up on a year-to-year basis.
He said they had been waiting for that moment since mortgage rates began to increase in 2022.
“That purchase lock count turning around, I think that’s really a strong indicator that in many ways, the market has hit its floor and we’re turning a corner,” O’Connell said.
O’Connell said they have noticed a shift in the share of conforming loan products, which is now down to 51%. That’s the lowest figure reported since Optimal Blue began reporting lock data in January 2018.
FHA, VA, and non-conforming loans gained ground last month, with FHA locks rising to 21%, VA at nearly 11.5%, and non-conforming loans at 16%.
“The dynamic of where the production is coming from has definitely changed. It’s not particularly surprising given the affordability challenges. You would expect in a more challenging environment, from an affordability perspective, that people would gravitate towards an FHA loan,” O’Connell said.
Optimal Blue’s data is used by the Federal Reserve, think tanks, and investors but O’Connell said their primary end market is the mortgage community.
“Folks on the production side are leveraging our data as a way to stay informed about what is going on in the industry so that when they’re interacting with a borrower, they can really be an advisor and provide some additional knowledge about what is going on in the market to borrowers,” he said.
Consumer confidence in the housing market is improving. The Fannie Mae Home Purchase Sentiment Index decreased 1.9 points in December to 73.1, but is up 5.9 points compared to last year.