Mortgage rate locks fell to pre-pandemic levels in November

The mortgage rate foreclosure volume in November declined for the third month in a row, to a level last seen in February 2020, just before the start of the pandemic upheaval, Black Knight said.

Loan freezes fell 4.7% in November from October, and down 20.1% from november 2020, as rate and term refinancing activity has been hit hard by rising interest rates.

November’s decline in rate foreclosure activity follows a 6% month-over-month drop in October and a 10% drop in September. The Black Knight Market Volume Index for November was 240. In October, the MVI was 252, September’s was 268, and August’s was 296. A year ago, the index was from 299.

Consumers blocked 9.4% fewer rate and term refis in November (a 49 MVI) compared to October (54), while less rate sensitive products saw smaller declines in activity: purchase blocks decreased by 3.9% (132 versus 138) and cash in refis fell 2.5% (59 vs. 60).

Year-on-year, rate and maturity refits fell 65%. But, this was offset by a 12.6% increase in buy rate locks and a 35.7% increase in withdrawal refi volume.

“While 30-year rates ended November relatively stable from where they were at the start of the month, there was some volatility in rate offerings throughout the month,” said Scott Happ, president of Black Knight Secondary Marketing Technologies, in a press release. “Rates have fluctuated within a range of around 21 basis points throughout the month as the market digested the news of the Fed and the Fed’s announcement of the cut. new variant of omicron.

The only product to gain market share during the month was non-conforming loans, up 58bp from October to 14.4%. Compliant mortgages accounted for 65.9% of rate freezes, down just 3bp; The Federal Housing Administration fell 21 basis points to 10.5% and Veterans Affairs held an 8.4% share, down 34 basis points. Mortgage loans from the US Department of Agriculture held a 0.8% share.

From year to year, the changes are more dramatic. Non-conformances saw a 564 basis point increase in market share compared to November 2020. For the FHA insured product, the share increased by 59 basis points. At the same time, the conforming action fell by 302 bps and the VA action fell by 312 bps.

Although the rise in home prices has moderated in recent months, it is still at record levels. The average loan size increased by $ 7,000 to reach $ 337,000 in November.

“As a result, we continue to see non-compliant jumbo lending products gaining market share at the expense of agency volumes,” Happ said. ” With higher compliant loan limits announced by the Federal Housing Finance Agency to take effect in early 2022, it will be interesting to see how far this trend continues. “

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