Mortgages rates that fell to their lowest levels in nearly a year generated a sharp increase in rate-lock activity in September as borrowers rushed to refinance higher-rate loans.

The September 2025 Market Advantage mortgage data report from Optimal Blue showed total lock volume rose 28% from August to September.

Refinance volumes drove the increase though purchase locks also outperformed seasonal trends, rising 6% from August and 9% year over year on account of slightly improved affordability. Debt-to-income ratios trended lower last month across all mortgage products, cited by Optimal Blue as evidence of improved affordability.

A similar report published last week by ICE Mortgage Technology, a division of Intercontinental Exchange Inc., indicated homebuyer affordability in September had reached its best levels since early 2023.

Optimal Blue reports that last month’s surge in refinance volume was the largest such “wave” since early 2022. The share of refinances among overall lock volumes last month was 39%, the highest level in two years, with cash-out refinance share rising 13%.

“The rate rally that began in late summer accelerated in September, and borrowers reacted quickly,” said Mike Vough, head of corporate strategy at Optimal Blue, in a press release, noting how the securitization opportunity for large lenders expanded last month.

According to Optimal Blue, sales to aggregators and the cash window operated by Fannie Mae and Freddie Mac — through which lenders sell loans to the government-sponsored enterprises directly for cash — each fell 100 basis points to 32% and 23%, respectively.

Agency mortgage-backed security (MBS) executions, meanwhile, grew to 42% from 40%, with the number of loans sold in the highest pricing tier rising 300 basis points, or 3%, to 78%, “suggesting less focus on delivery profiles and fewer eligibility exceptions influenced pricing decisions,” the report read.

“This combination of stronger pricing and greater securitization participation underscores lenders’ efforts to optimize execution as volume rebounds while maintaining profitability,” Vough added. Mortgage-servicing rights (MSR) values also dipped slightly with falling rates.

The Optimal Blue Mortgage Market Indices (OBMMI) 30-year conforming fixed rate ended September at 6.32%, down 18 basis points from August. Rates for 30-year fixed-rate mortgages backed by the Federal Housing Administration fell 18 basis points to 6.08%. Rates for mortgages backed by the Department of Veterans Affairs fell to 5.82%.