MCT said additional rate hikes are anticipated and may hamper origination volume, which they said is at “a new normal.”

MCT’s June data also shows a nearly 8% drop in total lock volume year over year. After hitting lows at the beginning of the year for purchase, rate/term refinance, and cash out refinance, each production type continues to creep slowly upward, MCT said.

Rhodes noted that economic reports will continue to have an outsize impact on the Federal Reserve’s decision making. The labor market is gradually moderating, but conditions remain too hot for the Fed’s liking.

Job gains were relatively solid yet again in June, with total nonfarm payroll employment reaching 209,000 jobs, compared to 339,000 in May, according to data released Friday by the Bureau of Labor Statistics. 

“If labor markets cool off, that could give the Fed a reason not to
raise rates in July,” Rhodes said. “This would provide a nice
bounce in the markets, but I’m not holding my breath.”

Fannie Mae reported earlier this month that recent housing market data suggests prospective borrowers have come to terms with high rates.

MCT’s Rate Lock Indices present a snapshot of rate lock volume activity in the residential mortgage industry broken out by lock type (purchase, rate/term refinance, and cash out refinance) across a broad diversity of lenders (e.g., sizes, products/services offered, business models) nationally.