- According to the Optimal Blue Mortgage Market Indices, 30-year
conforming rates crossed 7% for the first time since November 2022, before falling sharply and then
rebounding to 6.88%
- Overall rate lock volumes were down 7% month over month in
July, with purchase lending continuing to make up the vast amount
of lock volume, accounting for 88% of total lock activity
- Even so, purchase lock counts were down 27% year over year and
35% compared to 2019 pre-pandemic levels, as higher interest rates
and persisting low inventories dampened demand
- As reported in Black Knight's most recent Mortgage Monitor
report, signs of credit tightening have been seen in July locks in
rising down payments, falling loan-to-value ratios and higher
credit scores
- Average purchase price edged lower to $456K, with an average loan amount of
$358K in July as we move past the
historically typical June pricing peak
- The average credit score among primary residence purchase locks
hit a record high in the first week of July before edging modestly
lower to remain flat in July
- Adjustable-rate mortgages (ARMs) fell to 6.79% of July's rate
lock activity, as rates for such products became less competitive
against fixed products
JACKSONVILLE, Fla., Aug. 14,
2023 /PRNewswire/ -- Today, Black Knight,
Inc. (NYSE:BKI) announced the release of its latest
Originations Market Monitor report, looking at mortgage origination
data through July 2023 month-end.
Leveraging daily rate lock data from Black Knight's Optimal Blue
PPE, the Originations Market Monitor provides the industry's
earliest and most comprehensive view of origination activity.
"While they moved around a bit in July, there was no escaping
the fact that conforming 30-year rates topped 7% in July for the
first time since they spiked last fall," said Andy Walden, vice president of enterprise
research and strategy at Black Knight. "On both a practical and
psychological level, that put further downward pressure on mortgage
demand. Purchase loans continue to dominate the origination
pipeline, but current housing market dynamics are just not
conducive to boosting homebuyer origination volumes."
The month's pipeline data showed rate lock activity fell for the
second consecutive month, dropping 7% overall. Purchase locks,
which accounted for 88% of all July activity, fell 7.4% from June.
Longer term, purchase lock counts are down 27% year over year and
35% off 2019 pre-pandemic, levels. Cash-out refinances also
declined (-5.4%) and are hovering close to 60% below where
they were in July 2022 when interest
rates averaged in the mid- to high 5% range. Rate/term refis
increased by a modest 1.9% in July, but remained down more than 31%
year over year from an extremely low ceiling; July 2022 itself had marked a 93% year-over-year
decline. Locks on such products will likely remain constrained for
some time to come; just 3% of existing mortgage holders have
first-lien rates at or above today's levels.
"With home prices hitting new peaks across many parts of the
country, and no end in sight to the for-sale inventory shortage,
the housing market continues to reheat," Walden continued. "It's
worth noting, however, that – in a 'normal' year – June typically
marks the calendar peak of home prices on a non-adjusted basis, so
you would normally expect to see a decreasing trend through year's
end and into February. That said, this year, and this market, have
been anything but normal. Rising rates may be tamping demand for
homes at such record high prices, as evidenced by rate lock
activity, but they've still yet to overcome an even greater deficit
of supply. As a result, the purchase market is in a stalemate."
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 July'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:
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Michelle Kersch
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Mitch Cohen
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904.854.5043
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704.890.8158
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michelle.kersch@bkfs.com
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mitch.cohen@bkfs.com
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SOURCE Black Knight, Inc.