The rise in buy exercise pushed down the refinance share of exercise to 41% of all locks, in contrast with 44% the month prior. Nonetheless, refinancing remained elevated, with rate-and-term refi locks rising 3% month over month and 280% in comparison with February 2025. Money-out refi quantity elevated 1% from January and 34% from a yr earlier.
“February’s knowledge exhibits the market settling right into a more healthy steadiness between buy and refinance exercise as charges moved decrease,” Mike Vough, senior vp of company technique at Optimum Blue, stated in an announcement. “Buy demand is again after a sluggish begin to the yr, however refinance share continues to be working at 41%, which is larger than something we noticed between early 2022 and late final yr.”
Mortgage charges declined throughout main mortgage merchandise through the month. The Optimum Blue Mortgage Market Indices’ (OBMMI) 30-year conforming fastened fee — the benchmark for mortgage fee futures traded by CME Group — ended February at 5.90%, down 17 foundation factors from January.
Charges for jumbo loans and U.S. Department of Veterans Affairs (VA) mortgages every fell by 11 bps, whereas charges for Federal Housing Administration (FHA) merchandise declined by 13 bps.
In the meantime, the 10-year Treasury yield fell practically 30 bps to three.97%. The spread between the 10-year Treasury and the OBMMI 30-year fee widened to 193 bps, indicating that mortgage rates didn’t fall as rapidly as these within the broader bond market.
The report additionally confirmed shifts in secondary market execution as pricing spreads widened and supply methods advanced. Greatest-efforts-to-mandatory spreads widened for standard merchandise, whereas extra hedged mortgage gross sales moved towards the company money window.
“In an surroundings like this, lenders are paying shut consideration to how they execute and handle danger,” Vough stated. “We’re seeing extra lively positioning throughout supply channels and servicing property as lenders steadiness near-term pricing with longer-term portfolio worth.”
Refinances accounted for 41% of February lock quantity, whereas buy loans rebounded following a slower begin to the yr. Conforming loans represented 53% of complete locks, with nonconforming loans accounting for 16%. FHA loans made up 17%, VA loans 13% and U.S. Division of Agriculture (USDA) loans 1%.
Adjustable-rate mortgages (ARMs) additionally gained traction, rising to 10% of complete lock quantity, up from 6.9% a yr earlier.
Common mortgage quantities continued to climb. The nationwide common mortgage measurement elevated to $404,586 in February, up from $400,667 in January, marking the primary time the common has remained above $400,000 in consecutive months. The nationwide common loan-to-value ratio was 80.32%.
Mortgage servicing rights (MSRs) values for conforming 30-year loans rose barely through the month, rising 2 foundation factors to 1.18%, whilst benchmark mortgage charges declined.
Regional mortgage sizes assorted broadly, starting from $875,787 within the San Francisco Bay Space to $319,743 in San Antonio, in keeping with the report.
