The latest mortgage-rate lock activity from Optimal Blue revealed that, even with rates receding, home purchase movement remained stagnant over the late spring buying season, though refinances saw a big improvement.

The 30-year conforming rate was 8 basis points lower at the end of June than it was at the end of May. But purchase lock counts were down 8% annually in June — a second straight decrease (they were down 4% in May) after a year-over-year uptick in April.

The drop in rates did trigger a 39% month-over-month jump in rate-and-term refinance volume and an 11% increase in cash-out volume, combining for a 22% pick-up in total refinance activity. But with purchase volume down 1% from May, the refi rebound did little to drive total volume.

Total rate lock volume was down 12% month over month because there were fewer market days in June than May. Adjusting for the difference, lock volume was up just 2% from the month prior.

“Despite an improvement in interest rates, purchase activity was subdued in June,” noted Brennan O’Connell, Optimal Blue’s director of data solutions. “However, many homeowners with higher rates – particularly those who closed on their mortgage in the last 12 to 18 months – jumped at the opportunity to refinance, even for a small reduction in monthly payments.

“This behavior speaks to the ongoing inventory and affordability challenges consumers are experiencing,” O’Connell continued. “As we look toward the back half of 2024 and the potential for rate relief from the Fed, purchase lock counts will provide insight into if and when production will turn the corner.”

Amid the sluggishness in the homebuying market, average prices as tracked by Optimal Blue dropped for the first time this year. Purchase prices fell by roughly $1,500 to $478,800 in June, with average loan amounts dropping by $300 month over month to $374,200.