Rate lock-in for all mortgage products

Despite very low and stable mortgage rates, overall rate freezes, especially rate / maturity refinances, were still down in May, mainly due to low inventories, according to the latest Black Knight Originations Market Monitor report.

“Although interest rate offers tended to fall for all mortgage products in May, overall rate freezes were still down in all areas,” said president of Black Knight Secondary Marketing Technologies. Scott Happ. “The severity of shortages of inventory to sell appears to be a key factor in the 3.4% drop in buy locks from April, but the drop in refinance locks seems to have more to do with borrower psychology. some of the enthusiasm in the market, but despite significant increases in incentives to refinance since then, refinancing activity has simply not rebounded as expected. “

Data for May showed a 4.7% decrease from April for overall rate freezes. Refinancing locks fell 8.2% more pronounced, according to the report.

The declining refinancing market share in May fell to 44% of the month’s origination activity. On an annual basis, only rate / term refinancing loans are down from last April (-45%), while withdrawals and purchase loans are up year on year , respectively 32% and 43%.

“As interest rates fell from March to May, incentives for refinancing increased by 15%,” Happ continued. “This brought the number of high-quality refi applicants in the market to over 14 million at the end of May, but rate foreclosure volume has not kept pace. Rather, refinancing rate locks are down 27% over the same period, slowing into what would otherwise be an expected acceleration period. “

The following are some other key elements from the May Activity Report, which is available in full on the Black Knight website, here.

  • Average loan size in May increased $ 6,000 at $ 316,500, probably based on an increasing share of loans as house prices rise
  • Although the number of applicants for high-quality refinancing rose from 12 to over 14 million from March to May, an increase of 15%, actual refinancing rate freezes fell by 27% during the same period. .
  • Black Knight’s OBMMI daily interest rate tracker showed the 30-year rate in line with May’s end-of-month average of 3.15%, down 2 basis points (BPS) from April and down by 7 BPS since the end of February

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