Refi Volume Saw A Boost In July

Refinance volumes got a boost in July as rates moderated to a palatable level for homeowners looking to save.

Optimal Blue’s July 2024 Market Advantage mortgage data report showed refinance demand rising to its highest level since September 2022.

Lower interest rates also led to increased purchase activity which, combined with the refi boom, resulted in a 3.5% increase in mortgage rate locks month-over-month.

“The July report shows a notable uptick in refinance activity, particularly rate-and-term refinances, which jumped 12% as borrowers responded to declining interest rates,” said Brennan O’Connell, director of data solutions at Optimal Blue. 

“The drop in the Optimal Blue Mortgage Market Indices 30-year conforming rate to 6.67% played a significant role in this growth, and we observed the highest level of refinance activity since September 2022.”

Purchase activity rose by 2.5%, cash-out refis were up 5.9%, and rate-term refi activity jumped by 12.3%.

Notably, purchase locks remained down 7% YOY. But Optimal Blue notes that this is still better than June’s 17% YOY decline.

Rates have softened in the last few months. The 30-year fixed rate fell to 6.55% last week, its lowest level since May 2023. Further declines are expected when the Central Bank cuts rates, which Wall Street is betting will happen in September.

The most recent jobs report, which sparked panic in the stock market, has cast a shadow on the Fed’s choices, but a single 25 basis-point cut to the target federal funds rate at the Fed’s Sept. 17-18 meeting remains the majority opinion.

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