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Analyzing the Swift ‘Shift in the Mortgage Originations Landscape’

Black Knight, provider of several regular mortgage- and property-data reports and analytics of particular value to lenders and servicers, has launched a new monthly data report that watches the originations market.

Reps from Black Knight say the Originations Market Monitor will feature monthly snapshots of key pipeline metrics from Optimal Blue’s rate lock data and additional insight from its Secondary Marketing Technologies group for an early and comprehensive look at mortgage origination trends.

Right off the bat, the report revealed things that Black Knight analysts say "clearly show the impact of recent interest rate increases across volumes"—the refinance share of originations dipped beneath 50% for the first time well over a year.

Black Knight’s OBMMI daily interest rate tracker showed March’s month-end average conforming 30-year rate offering at 3.34%, up nearly 60 basis points from February.

Overall rate lock volume was up 2.5%, with both purchase locks and cash-out refi locks (up by 4%) experiencing month-over-month growth, by 32% and 4% respectively.

Refinances in which the borrower is securing a better rate or term for their mortgage fell drastically, down more than 26% for the month and more than 35% since December, according to the tracker, which has shifted the originations market mix to 52% purchase and 48% refinance. This marks the first time—but almost certainly not the last, according to the report–that purchase loans have made up a majority share of monthly mortgage lending since December 2019.

“Recent—and sharp—upward movements in interest rates have shifted the mortgage originations landscape very quickly,” said Black Knight Secondary Marketing Technologies President Scott Happ. “The wave of refinancing activity of the last year and some months has suddenly given way to a purchase-heavy mix. The implications of this shift touch nearly every area of mortgage lending, which in turn has implications for the wider economy. In an environment like this, having access to the fullest, most current market data is essential.

That's the purpose of the company's Originations Market Monitor, he added— "to provide the public a high-level view of the kind of data our clients use daily to drive greater profitability and efficiencies.”

Happ reports that it also saw credit scores pull back, "a trend that’s likely to continue among refis as high-credit borrowers, who have been largely driving record volumes, exit the market.”

Black Knight's new monthly report will feature high-level origination metrics for the U.S. and the top 20 metropolitan statistical areas by share of total origination volume, its authors note.

Much more detail on March’s origination activity can be found in the full Black Knight Originations Market Monitor Report.


About Author: Christina Hughes Babb

Christina Hughes Babb is a reporter for DS News and MReport. A graduate of Southern Methodist University, she has been a reporter, editor, and publisher in the Dallas area for more than 15 years. During her 10 years at Advocate Media/Dallas Magazine, she published thousands of articles covering local politics, real estate, development, crime, the arts, entertainment, and human interest, among other topics. She has won two national Mayborn School of Journalism Ten Spurs awards for nonfiction, and has penned pieces for Texas Monthly, Salon.com, Dallas Observer, Edible, and the Dallas Morning news, among others.

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