Mortgage Rate-lock Volume Rises In December As Refinances Surge

Mortgage rate-lock activity ended 2025 stronger than typical holiday season patterns, according to Optimal Blue‘s December 2025 Market Advantage mortgage data report released on Tuesday.

Total lock volume rose 2% from November and finished 30% higher than a year earlier, driven largely by rate-and-term refinances, which increased 13% month over month and more than 170% from December 2024.

Cash-out refinances increased by 1% from November and were up 35% year over year. Purchase lock activity slipped 1% from November but ended December 7% higher than a year earlier.

“Finishing the year with higher lock volume in December is a clear signal that borrower demand has adjusted to today’s rate environment,” Mike Vough, senior vice president of corporate strategy at Optimal Blue, said in a statement.

“Refinance activity continues to do the heavy lifting, but the fact that purchase volume held essentially flat month over month and finished the year higher than last December speaks to a market that is more durable than many expected.”

Optimal Blue observed that lenders adjusted secondary market strategies as pricing dynamics evolved. Best efforts to mandatory spreads widened across products, bulk aggregator execution regained share and mortgage servicing rights (MSRs) values increased despite largely flat primary mortgage rates.

“December’s secondary data shows lenders actively recalibrating execution as spreads widened and pricing discipline remained tight,” Vough said. “The shift back toward bulk aggregation, combined with stable top-tier pricing and rising MSR values, reflects investor demand that is focused on end-of-year balance sheet management and long-term value as we head into 2026.”

Refinances accounted for 37% of all locks in December, up 224 basis points (bps) from November and 1,354 bps from a year earlier. The refinance pull-through rate improved to 69.2%.

Purchase pull-through, meanwhile, rose to 85.7%. Nonqualified mortgage (non-QM) production exceeded 9% of total locks and was up 50 bps month over month.

Conforming loans represented 51% of locks in December, while the nonconforming share rose to 17%. Federal Housing Administration (FHA), U.S. Department of Veterans Affairs (VA) and U.S. Department of Agriculture (USDA) loans each gained share during the month. Planned unit developments accounted for 29% of locks by property type.

Mortgage rates were largely unchanged. The Optimal Blue Mortgage Market Indices (OBMMI) 30-year conforming fixed rate ended December flat at 6.14%. FHA rates edged down to 5.98%, VA rates fell to 5.71% and jumbo rates declined to 6.41%. The 10-year Treasury yield rose 14 bps to 4.14%, compressing the mortgage–Treasury spread to 200 basis points.

Mortgage servicing rights values for conforming 30-year loans increased 5 bps to 1.14%. Top-tier pricing remained steady, with 79% of loans sold at the highest price tier.

The average borrower credit score slipped to 732, while the average loan size rose to $394,502.