According to Black Knight's monthly market monitor, May saw a 5% drop in rate lock volume due to a slow month for refinancing. The drop in refinance activity fell for both rate term refis and cash-outs. This is not good news for lenders because they rely on the purchase market for origination volumes.
Black Knight's monthly market monitor report watches the trends in the homeownership life cycle. It is the leader in the industry with its own software, data and analytics program. The combined insight of the Black Knight HPI and Collateral Analytics’ home price and real estate data provides one of the most complete, accurate and timely measures of home prices available, covering 95% of U.S. residential properties down to the ZIP-code level. In addition, the company maintains one of the most robust public property records databases available, covering 99.9% of the U.S. population and households from more than 3,100 counties.
The report revealed that slower monthly mortgage originations caused a dip
of 4.8% in rate locks. Mortgage rates are down this month 7 basis points from April which came in at 5.34%. There was a 23.6% decline in rate/term refinance lending activity from April and an 89.9% dip year over year. As for cash-out refinance locks they were down 11.9% from April and 42.2% from the same time last year.
“We’ve seen rate/term refinance activity essentially evaporate and cash-out activity is now suffering as well,” said Scott Happ, president of Optimal Blue, a division of Black Knight. “While there is volume pressure across the board due to rising rates, purchase volumes are holding up the best and are now driving 82% of all origination activity.”
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