First lien originations jumped in 2016 to $2.1 trillion, the highest point since 2012, according to a report from the Urban Institute.

Of these originations, the share of portfolio originations increased to 30.9%, up from 30.2% in 2015, the report shows. The GSE share increased to 45.9%, up from 45.7% the previous year and the FHA and VA share decreased to 22.8%, down from 23.3% in 2015.

The chart below shows, unlike pre-crisis years, private-label securities no longer hold a significant share in the market. In both 2015 and 2016 the share of private-label securities totaled well below 1%.

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(Source: Inside Mortgage Finance, Urban Institute)

But despite the increase in originations to the highest level since 2012, profitability is down.

Originator Profitability and Unmeasured Costs, formulated and calculated by the Federal Reserve Bank of New York, is a measure of originator profitability. OPUC uses the sales price of the mortgage in the secondary market and adds two additional sources of profitability: retained servicing and points paid by the borrower.

When originator profits are higher, mortgage volumes are less responsive to changes in interest rates, because originators are at capacity, the report explains. Driven by the post-Brexit decline in interest rates, the chart below shows OPUC rose sharply to $3.21 per $100 in July 2016. Since then it has declined to $2.29 in April 2017, the lowest level since January 2016.

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(Source: Federal Savings Bank of New York, Urban Institute)

For now, profitability remains low, meaning mortgage origination volumes could be greatly affected by the Federal Reserve’s decision in June over whether to raise interest rates.

Currently, experts claim that there will be several rate hikes this year, including one in June, however minutes from the May meeting show that rate hike isn’t guaranteed.