With spring homebuying season underway, a 7.5% increase in mortgage rate locks on new home purchases helped spur a 3.2% gain in total month-over-month mortgage lock volume in April. However, purchase rate locks were down 5% last month compared to April 2024, reflecting a consistent year-over-year decline each month this year, according to a recent Optimal Blue mortgage data report.

A mortgage rate lock is an agreement between a lender and a borrower that the interest rate on the loan won’t change during the period when the loan is being processed. The Federal Housing Administration (FHA) share of rate lock volume rose 57 basis points to 20.2% in April, while non-agency lending fell by nearly the same amount, suggesting “reduced investor risk tolerance amid economic uncertainty,” according to Optimal Blue.

“Last month’s report showed early signs of spring homebuyer activity, and April confirms the season is underway with a solid increase in purchase locks,” stated Brennan O’Connell, director of data solutions at Optimal Blue. “We also saw a shift toward FHA loans, often used by first-time or credit-challenged buyers, and away from non-conforming products, possibly reflecting investor caution in response to broader economic uncertainty.”

In a notable shift, rising mortgage rates led to a slowdown in refinance activity following March’s refinancing surge. Rate-and-term refinances fell 15% month over month, while cash-out refinances dropped by 3%. Refinances accounted for 21% of all mortgage rate lock activity in April compared to 25% in March.

In a sign of homebuyers looking for ways to improve affordability, the adjustable-rate mortgage share of total lock volume was 10.3% in April, up from just under 9% in March.

The average loan amount fell $4,200 last month to $387,500, while the average home purchase price declined $3,400 to $483,500, according to Optimal Blue.