Overall Rate Locks Up 19% in March

Black Knight, Inc. yesterday announced the release of its latest Originations Market Monitor report, looking at mortgage origination data through March month-end. Leveraging daily rate lock data from the Black Knight 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 interest rates spiked in March, with 30-year offerings climbing 70 basis points over the course of the month,” said Scott Happ, president, Optimal Blue, a division of Black Knight. “In fact, our OBMMI daily interest rate tracker showed the average 30-year conforming rate reach as high as 4.93% late in the month before pulling back slightly to close out March at 4.79%. And yet, despite seeing the fastest one-month rise in rates in nearly 13 years, we saw purchase lock volumes increase by 31% from February — likely as prospective buyers moved to lock in their loans before rates climbed any higher.”

The month’s pipeline data showed overall rate locks up 19.1% from February, driven by a 31.5% surge in purchase lending activity. While cash-out refinance locks remained relatively flat (+1.6%), rate/term refinance activity continued to slide, with March marking the sixth consecutive monthly decline. The continued decline in rate/term refinance locks pushed the refi share of the market down to just 28%, the lowest point since November 2018. Non-conforming loan products continued to gain market share at the expense of agency volumes as the pace of home price growth has reached new record highs. Pull-through rates — the share of locks that result in funded loans — fell on both purchase and refinance locks, with refi pull-through falling to just 65.7%.

“As home prices continue to climb — even in the face of sharply rising interest rates — we’ve seen the average loan amount rise as well,” Happ continued. “The average loan rose by $8,000 to just under $362,000 in March, representing a more than 23% increase over February’s rise. In turn, non-conforming products — including both jumbos and loans with expanded guidelines — continued to take market share from conforming loans and accounted for a full 18% of the month’s lock activity. The FHA share of lock activity also rose on strong purchase lending demand.”

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