Mortgage rate lock volumes declined monthly in November “consistent with seasonal patterns,” though overall activity remained higher on an annual basis.
Newly released data from capital markets advisory firm Mortgage Capital Trading (MCT) show total lock volumes declined 4% from October to November, led by a more than 5% drop in rate-and-term refinance locks.
Purchase locks dropped 4.23% while cash-out refinance locks exhibited more resilience, slipping only 1.8% from the prior month.
Andrew Rhodes, head of trading at MCT, described the seasonal slowdown as “pretty classic” in a statement accompanying the figures.
Year-over-year lock volumes were 32% higher for all categories, led by rate-and-term refinances that were 403% higher than a year ago. Rate locks for cash-out refinances were 54% higher annually and purchase locks just under 7% higher.
Looking ahead to the first quarter of 2026, Rhodes said the mortgage market will coast on investors’ reactions to upcoming employment reports. By extension, the fate of the broader housing market hangs in the balance.
Shutdown-delayed October and November jobs data released by the Bureau of Labor Statistics (BLS) on Tuesday showed the unemployment rate rose to 4.6% in November, its highest mark in four years.
Employers added 64,000 jobs last month but had shed 105,000 in October. Revisions to September labor data included in the report lowered that month’s total job gains from 119,000 to 108,000.
Forward-looking projections released in conjunction with last week’s Federal Reserve decision to lower its benchmark borrowing rate by 0.25% showed median estimates of just one additional quarter-point cut in 2026.
A December employment summary is scheduled to be published on Jan. 9, ahead of the Fed’s next policy meeting at the end of January, which will shed light on whether more aggressive easing is called for.
“If upcoming non-farm payroll numbers come in meaningfully below expectations,” said Rhodes, “I think the market could rally on that pretty quickly, because it potentially puts another cut back on the map for 2026.”
Housing economists have projected that mortgage rates will barely budge next year, remaining in their current low-6% range.
As the housing market enters its fourth year of historically slow home sales, improvements in lock volumes and loan production will require decisive rate shifts “into the high fives, which could reignite refinance demand,” said Rhodes.
“If the Fed’s dot plot stays consistent, 2026 could be a year of treading water,” he added. “That leaves the market in a bit of a holding pattern until we get more data.”
