- Rate lock volumes declined by 19.4% in December as elevated
mortgage rates kept buyers, sellers and refi candidates on the
sidelines
- Purchase locks fell 20.5%, while rate/term refis dropped 11.2%
and cash-out refis were down 14.1%, with total refinance locks
making up 16% of the month's overall activity
- Optimal Blue Mortgage Market Indices from Black Knight showed
30-year rates dipping below 6.25% in mid-December before reversing
course to finish the month at 6.52%, roughly even with the previous
month
- Seasonal headwinds combined with interest rate and
affordability pressures continue to challenge purchase lending,
with the dollar volume of such locks down 45.9% over the past three
months and down 48.9% from December
2021
- Purchase lock counts – which exclude the impact of home price
changes – were down 47% year-over-year with total rate lock counts
down nearly 70% over that same span
- Using Black Knight's McDash mortgage performance data to
provide comparative history, that represents the fewest purchase
locks in a single month since early 2014, and fewest overall rate
locks on record dating back to January
2000 when Black Knight began reporting origination
metrics
- The number of mortgage holders locking in a rate to refinance
hit a record low for the fourth consecutive month in December, and
is now more than 50% below the previous record low set back in
July 2000
- Credit scores for cash-out refinances rose 5 points to 691
(down 34 points over the past 12 months) and fell 4 points for
rate/term refinances but remained unchanged for purchase
transactions
JACKSONVILLE, Fla., Jan. 9, 2023
/PRNewswire/ -- Today, Black Knight, Inc. (NYSE:BKI) announced
the release of its latest Originations Market Monitor report,
looking at mortgage origination data through December month-end.
Leveraging daily rate lock data from Black Knight's Optimal Blue
PPE – mortgage lending's most widely used pricing engine -- the
Originations Market Monitor provides the industry's earliest and
most comprehensive view of origination activity.
"Mortgage rates declined through the first half of December but
reversed course as the Fed doubled down on their stance of
additional tightening in 2023," said Kevin
McMahon, president of Optimal Blue, a division of Black
Knight. "The spread between mortgage rates and the 10-year Treasury
yield narrowed another 22 basis points during the month to 264
basis points, which is 40 basis points off the recent high, but is
still up 81 basis points for the year."
The month's pipeline data showed overall rate lock dollar volume
down 19.4% month over month, the lowest level in the five years
Optimal Blue has been tracking the metric. The decline was driven
by a 20.5% drop in purchase locks, reflecting the strong impact of
seasonality and affordability pressures. Refinance activity
continued to fall by double digits, with cash-outs now down 87% and
rate/term refinances down 93% from December
2021. Combined, refinance activity made up 16% of the
month's lock activity.
When excluding the impact of record home price changes on
volumes by looking at the raw number of lock counts, the
data shows the number of purchase locks in December down 47%
year-over-year and down 33% compared to pre-pandemic levels in
2019, with overall rate lock counts down nearly 70% from last
year's levels.
"Using Black Knight's McDash mortgage performance data to
provide comparative history, December saw the fewest purchase locks
in a single month since early 2014, and the fewest overall rate
locks on record dating back to January
2000 when Black Knight began reporting origination metrics,"
McMahon continued. "The number of mortgage holders locking in a
rate to refinance their existing mortgage also set a new record low
for the fourth consecutive month."
Each month's Originations Market Monitor provides high-level
origination metrics for the U.S. and the top 20 metropolitan
statistical areas by share of total origination volume. Much more
detail on December's origination activity can be found in the full
Black Knight Originations Market Monitor report.
About Black Knight
Black Knight, Inc. (NYSE:BKI) is an
award-winning software, data and analytics company that drives
innovation in the mortgage lending and servicing and real estate
industries, as well as the capital and secondary markets.
Businesses leverage our robust, integrated solutions across the
entire homeownership life cycle to help retain existing customers,
gain new customers, mitigate risk and operate more effectively.
Our clients rely on our proven, comprehensive, scalable products
and our unwavering commitment to delivering superior client support
to achieve their strategic goals and better serving their
customers. For more information on Black Knight, please visit
www.blackknightinc.com/.
For more information:
Michelle Kersch
|
Mitch
Cohen
|
904.854.5043
|
704.890.8158
|
michelle.kersch@bkfs.com
|
mitch.cohen@bkfs.com
|
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SOURCE Black Knight, Inc.