Mortgage rate-lock activity increased 13% over the month in March to land about 26% higher than year-ago levels, as purchase demand proved resilient despite higher borrowing costs.

Adjustable-rate mortgages saw their monthly production share rise to its highest levels since late 2022, according to mortgage market intelligence platform Optimal Blue, which released its monthly origination report for March on Tuesday.

As purchase volumes gained ground, mortgage rates that ticked up anywhere from 40 to 50 basis points over the month lowered the refinance share of lock volumes to 28% from 41% in February, when average rates on typical 30-year home loans had dipped into the high-5% range.

Purchase lock activity, meanwhile, was 38% higher over the month in March and 20% higher than year-ago levels.

Origination share shifted away from conforming mortgage products meeting Fannie Mae and Freddie Mac underwriting guidelines toward government-insured and nonconforming loans, matching underlying shifts last month in mortgage credit availability.

Conforming rate locks comprised 50.3% of production share in March, down from 52.6% February. Federal Housing Administration (FHA) and non-qualified mortgage (non-QM) rate-lock volumes each rose about 145 basis points over the month to land at 18.5% and 17.9% total production share, while locks for loans backed by the Department of Veterans Affairs (VA) dropped to a 12.6% share from 13.2% in February.

First-time homebuyers saw their purchase share among conforming originations stay flat from February to March at 46%, an increase of three percentage points from three months ago.

First-time buyer share was 71% for FHA locks, up from the 70% share posted in February but unchanged from a year ago. First-time buyer share was 46% of VA production, down from 48% the prior month.

Non-QM production share crossed above 8% again in March. Non-QM lock volumes dipped below 8% in January and February after reaching an all-time high of 9% in December.

Across the non-QM channel, lending to residential real estate investors remained steady at around 32.3% of production, an increase of 49 basis points from February and a jump of more than five percentage points from a year ago.

Lock volumes for bank statement non-QM loans comprised about 33.4% of non-QM production in March, a decline from the 36% share seen in February.