Despite typical late-fall seasonality, November 2025 proved to be a standout month for the mortgage industry, marking the strongest November for lock activity in four years.
While total mortgage lock volume declined 25% from October, it remained up 17% compared to the same time last year, according to the latest data from Optimal Blue.
The company’s Market Advantage report portrays a market increasingly defined by rate relief, where homeowners are moving quickly to capitalize on stabilizing interest rates even as homebuyer demand softens.
Refinance activity was the primary driver of the year-over-year growth, with rate-and-term refinances skyrocketing 223% compared to November 2024. Cash-out refinances also posted strong numbers, rising 29% yearly.
“November’s data underscores a market still responding to rate relief even as seasonal patterns take hold,” said Mike Vough, senior vice president of corporate strategy at Optimal Blue, in a press release. “Refinances remain the clear standout, with rate-and-term activity running more than triple last year’s levels and cash-outs continuing to outperform. It was a notably strong November by any measure.”
However, in commentary provided to Scotsman Guide, Vough cautioned that the current wave of activity may have a shelf life.
“We may see the current spike in refinances continue into early 2026, but we should expect this momentum to wane and the pendulum to swing back toward a purchase market if this rate environment holds for a prolonged period of time,” he added.
In contrast to the refinance boom, the purchase market faced headwinds from both seasonal trends and structural affordability issues. Purchase lock activity declined 22% month over month and slipped 6% on the year.
The report attributed this slowdown to elevated home costs and limited inventory, which continue to restrain buyer demand.
When Scotsman Guide asked if the market is showing signs of a spring rebound, Vough noted that while headwinds remain, shifting loan metrics offer a glimmer of hope.
“Signals indicate that this is still an affordability and/or inventory challenge, but some potential relief may be on the horizon,” he said. “Optimal Blue data showed the average loan amount dropped from almost $400,000 to about $390,000 in November, which is a step in the right direction. Non-QM share hit a high-water mark of 9% in November, highlighting the continued rise in alternative credit vehicles.”
Interest rates provided a stable backdrop for borrowers in November. The Optimal Blue Mortgage Market Indices 30-year conforming fixed rate dipped one basis point to 6.14% for the month, marking a 53-basis point improvement from the same period in 2024.
Notably, Federal Housing Administration (FHA) rates fell five basis points to 5.99%, helping drive a shift in product mix toward government-backed lending. FHA share of total mortgage rate locks increased to 18.8%, while non-qualified mortgage (non-QM) share rose to 9% — the highest level ever recorded by Optimal Blue.
Meanwhile, the 10-year Treasury yield fell 11 basis points to 4% in November, widening the spread between mortgage rates and Treasurys by approximately 10 basis points.
Lenders also adjusted their execution strategies significantly in November. Sales to the agency cash window rose 300 basis points to account for 25% of total volume, interrupting a recent trend toward greater securitization.
Conversely, bulk aggregator share dropped 300 basis points to 27% and agency mortgage-backed securities deliveries dropped 100 basis points to 45%.
“Execution strategies shifted meaningfully in November,” Vough noted. “Lenders moved to the cash window as securitization momentum moderated, and pricing spreads broadened as more loans moved out of the top tier.”
