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In yet another indicator of the affordability issues that confront American homebuyers, the share of conforming mortgage rate-locks in the American housing market have hit a record low, according to a new report from Optimal Blue.

Conforming loans made up only 51 percent of purchase mortgage rate locks in 2024, the lowest figure since Optimal Blue began reporting lock data in January 2018. FHA, VA and non-conforming loans gained ground in the latest report with FHA locks rising to 21 percent, VA loans to nearly 11.5 percent and non-conforming loans at 16 percent.

Additionally, refinance activity is increasing. The share of refinance locks climbed to 24 percent, the highest since September, Optimal Blue said.

“December’s data illustrates how the market can adapt to shifting conditions,” said Brennan O’Connell, director of data solutions at Optimal Blue. “While a seasonal dip was expected, the year-over-year growth reflects resilience and an increasing demand for refinance opportunities driven by rate adjustments. Notably, conforming loan share has hovered around historic lows for the past five months, hitting 51% last month. This trend illustrates how borrowers are relying increasingly on government and non-conforming loans to finance in a challenging market.”

Greater Boston’s rate-lock volume dropped 15.5 percent month-over-month while rate lock volume across the nation decreased 8 percent month over month.

With affordability remaining an issue, there is also increased competition among buyers. The average homebuyer credit score was higher each month in 2024 than the previous 72 months, according to Optimal Blue.

Conforming Mortgage Share Reaches Record Low

by Sam Minton time to read: 1 min
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