Rate-and-term refinancing was a hot item in June, helping to increase overall mortgage activity by 1.95% month over month, according to Optimal Blue’s latest mortgage data report.

Optimal Blue found that the refinancing maneuver in which a homeowner replaces a current mortgage with a new loan that has a different rate or term, without taking cash out of home equity, jumped 17.4% month over month, and 18.4% year over year.

The refinance share of mortgage activity increased to 18% in June, compared to 16% in May. Purchase activity in June held steady from the previous month, which showed home sales were stronger than expected, considering the spring home-buying season usually begins to slow down in June.

Optimal Blue’s new non-QM lending market metric accounted for 7.4% of all June rate locks, a share that has been gradually increasing in recent months.

“As market conditions evolve and affordability challenges persist, non-QM lending offers a path for qualifying creditworthy borrowers who may not meet qualified mortgage guidelines,” said Mike Vough, head of corporate strategy at Optimal Blue. “The steady rise in this category reflects the industry’s growing focus on flexibility and meeting borrowers where they are.”

One reason for the increased refinancing was a minor drop in the 30-year conforming loan rate in June, which fell 17 basis points to 6.67%. Jumbo rates fell 24 basis points to 6.78%. Federal Housing Administration (FHA) rates declined 6 basis points to 6.47%, and the U.S. Department of Veterans Affairs (VA) rates decreased 16 basis points to 6.29%.

The average loan amount declined slightly to $386,084. Of the nation’s top 30 metropolitan statistical areas, the average loan amounts ranged from a high of $586,997 in New York City to a low of $311,331 in Indianapolis. The average loan-to-value ratio stood at 80.5%. The debt-to-income ratio averaged 36.8% for conforming loans, 44.7% for FHA loans and 43.8% for VA loans.