Optimal Blue’s February Market Advantage report showed a 7 percent month-over-month increase in mortgage lock volume, primarily driven by refinance activity.

Rate-and-term refinances saw a 40 percent jump from January as homeowners took advantage of the opportunity to lower their monthly payments. Cash-out refinances increased 4 percent month-over-month, while purchase lock activity held steady.

“Interest rate improvement, while marginal, is attracting refinance activity as homeowners who bought at higher rates work the numbers and find they can reduce their monthly payments or tap into home equity,” Optimal Blue Data Solutions Director Brennan O’Connell said. “The upcoming homebuying season will reveal whether purchase demand is poised for a rebound or if elevated rates will continue to keep buyers on the sidelines.”

Other findings from the February Market Advantage report, based on direct-source mortgage lock data, included:

• Purchase activity remained low for the second straight month, with volume down 5 percent year-over-year. Purchase lock counts fell 9 percent from the same time in 2024.
• Conforming loan volume edged up for a second month, reaching 52 percent of total volume. FHA share remained just above 20 percent, and VA share grew slightly to 11.5 percent. Non-conforming loan volume, including jumbo and non-QM loans, stayed flat at 15.5 percent.
• The mortgage rate spread to the 10-year Treasury hovered just above 230 basis points, a 30 bps improvement from year-over-year but still roughly 30 to 40 bps above the long-term average.
• The average credit score for cash-out refinances rose by 2 points to 695 and rose by 4 points for rate-and-term refinances to 732. The average purchase credit score held steady at 737.
• The average home purchase price rose from $476,000 to $480,200 month over month, driving a month-over-month increase in average loan amount from $376,400 to $380,500.