Refi Gains Momentum with Rates Dipping Below 6%
Mortgage Rates Fall, Refinances Rebound
Federal Reserve’s recent rate cuts, half a percentage point in September followed by another quarter-point cut in October, are pushing mortgage rates lower across all loan purposes. The average rates for cash-out refinance, purchase, and standard refinance loans have dipped to levels not seen since early 2023. This decline is offering a much-needed window of opportunity for borrowers looking to refinance at more favorable terms.
In the September-October period, the average mortgage rate across all loan types was 5.61%, based on the latest data from MBS Pivot (see Chart 1). This marks a significant improvement, especially for borrowers leveraging government-backed products like VA loans, which had a standout performance.
VA Loans Dominate the Refinance Market
Analyzing refinance activity by loan type, VA loans emerged as a clear winner, accounting for 15,039 loans with an average interest rate of 5.50%—one of the lowest among all loan categories (Chart 2).
This strong performance highlights the unique benefits of VA loans, which offer more competitive rates and lower fees for eligible veterans, their spouses, and service members. For comparison:
- USDA Rural Housing loans had the lowest average rate at 5.48%, though volume was minimal with only 15 loans.
- FHA loans saw 8,150 transactions, averaging a slightly higher rate of 5.62%.
- Conventional loans had a much larger volume (16,161 loans) but at a higher average rate of 5.71%.
Market Leaders in Agency Loan Production
Year-to-date data from MBS Pivot shows robust activity in the agency mortgage market, with 2.37 million loans originated totaling $791.5 billion. The top 3 market leaders are:
- United Wholesale Mortgage - $91 billion
- Pennymac - $77 billion
- Rocket Mortgage - $62 billion
Notably, Pennymac operates through two distinct entities: Pennymac Loan Services LLC, focused on origination and servicing, and Pennymac Corp, specializing in correspondent lending. This dual structure highlights a strategic approach, balancing direct loan originations with purchasing loans from other lenders for securitization (Chart 3).
Exploring MBS Data for Market Insights
Every month, Fannie Mae, Freddie Mac, and Ginnie Mae release loan-level data on their mortgage-backed securities (MBS). This raw data can be overwhelming to parse, but tools like MBS Pivot unlock these datasets, transforming them into actionable insights. By leveraging MBS Pivot, industry stakeholders can:
- Track lender strategies by product, channel, and geography.
- Analyze regional trends in lending activity.
- Monitor shifts in market share and competitive positioning.
- Examine credit characteristics, including metrics for first-time homebuyers.
These capabilities offer a clear view of the mortgage landscape, empowering users to make data-driven decisions and stay ahead in a competitive market.
Dive Deeper with MBS Pivot
To explore detailed product strategies, channel preferences, and geographic insights, check out the interactive dashboards on MBS Pivot. With easy access to blended loan-level data from all three major agencies, it’s a powerful tool for lenders, analysts, and investors looking to understand market trends and gain a strategic edge.
Ready to explore? Learn more about MBS Pivot and see how it can transform your business intelligence capabilities.
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