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Mortgage Rate Lock Volume Declines

Black Knight's latest Originations Market Monitor report showed overall rate lock volumes in April down across the board, falling 11.3% from March. Purchase locks declined 6% month-over-month. Both cash-out and rate/term refinance experienced sharper monthly dips at -13% and -20%, respectively.

The refinance share of the market dropped for another consecutive month in April, accounting for 45% of origination activity. For the year, while rate/term refinancing is down -34% from last April, both cash-outs and purchase loans have increased, 27% and 114%, respectively, YoY.

Black Knight's OBMMI daily interest rate tracker showed April's month-end average conforming 30-year rate at 3.17%, down 17 basis points from March but still up 34 basis points since the end of January.

"Despite interest rates trending downward in April across all mortgage products, the decreases did not seem to be enough to bring borrowers, particularly refi borrowers, back to the table," said Black Knight Secondary Marketing Technologies President Scott Happ. "April saw the lowest  overall rate lock volume since May 2020, with rate/term refinance lending the lowest since January 2020—before the 10-year Treasury yield fell below 1% for the first time ever, setting off a yearlong run of interest rates hitting 14 separate record lows in 2020."

He added that, as volume has tightened, average credit scores have declined across all products and purposes, and, he says, conventional loans have lost share to government-backed mortgages,

"Neither are unexpected developments given that, when rates begin to rise, higher-credit borrowers tend to simply not engage. Right now, though, rates are still hovering in a historically comfortable place, with approximately 14.5 million homeowners who could still likely qualify for and benefit from a refinance. It will be interesting— and telling—to see both how rates move in the coming weeks, and whether or not we see refi volumes increase as a result."

The recently launched Originations Market Monitor features monthly snapshots of key pipeline metrics from Optimal Blue’s rate lock data and additional insight from its Secondary Marketing Technologies group for what the creators call "an early and comprehensive look at mortgage origination trends."

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. Contact Christina at christina.hughesbabb@thefivestar.com.

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