Black Knight Originations Market Monitor: Despite Rate Offerings Dropping for All Mortgage Products in the Month, April Saw Lowest Total Lock Volume in Nearly a Year

Rhea-AI Summary

Black Knight, Inc. (NYSE:BKI) released its Originations Market Monitor report, indicating a significant decline in mortgage origination activity through April 2021. Rate lock volumes dropped by 11.3% from March, with refinance lending the lowest since January 2020. The report notes that refinance share fell to 45% of origination activity. Despite lower interest rates, borrower engagement remains weak, with potential refinancing opportunities for 14.5 million homeowners. The report provides detailed metrics for the U.S. and key metropolitan areas, revealing a shift towards government-backed mortgages.

Positive

• Year-over-year, cash-out refinances increased by 27% and purchase loans rose by 114%.

Negative

• Overall rate lock volume decreased by 11.3% from March.
• Refinance lending volume is at the lowest level since January 2020.
• Refinance share of origination activity fell to 45% in April.
• Rate/term refinance lending dropped 34% year-over-year.

JACKSONVILLE, Fla., May 17, 2021 /PRNewswire/ -- Today, Black Knight, Inc. (NYSE:BKI) announced the release of its latest Originations Market Monitor report, looking at mortgage origination data through April 2021 month-end. Leveraging daily rate lock data from Black Knight's 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.

"Despite interest rates trending downward in April across all mortgage products, the decreases did not seem to be enough to bring borrowers – particularly refi borrowers – back to the table," said Black Knight Secondary Marketing Technologies President Scott Happ. "April saw the lowest  overall rate lock volume since May 2020, with rate/term refinance lending the lowest since January 2020 – before the 10-year Treasury yield fell below 1% for the first time ever, setting off a yearlong run of interest rates hitting 14 separate record lows in 2020."

The report shows that overall rate locks were down across the board, falling 11.3% from March. While purchase locks saw a 6% month-over-month decline, sharper monthly drops were observed among both cash-out (-13%) and rate/term (-20%) refinances. The refinance share of the market mix dropped again in April, accounting for just 45% of the month's origination activity. On an annual basis, only rate/term refinance lending is down from last April (-34%), whereas both cash-outs (+27%) and purchase loans (+114%) are up year-over-year.

"As volume has tightened, we've seen average credit scores decline across all products and purposes, and conventional loans lose share to government-backed mortgages," Happ continued. "Neither are unexpected developments given that, when rates begin to rise, higher-credit borrowers tend to simply not engage. Right now, though, rates are still hovering in a historically comfortable place, with approximately 14.5M homeowners who could still likely qualify for and benefit from a refinance. It will be interesting – and telling – to see both how rates move in the coming weeks, and whether or not we see refi volumes increase as a result."

Each month's Originations Market Monitor provides high-level originations metrics for the U.S. and the top 20 metropolitan statistical areas by share of total origination volume. Much more detail on April'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:
Michelle Kersch	Mitch Cohen
904.854.5043	704.890.8158
michelle.kersch@bkfs.com	mitch.cohen@bkfs.com

 

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SOURCE Black Knight, Inc.

FAQ

What were the key findings in Black Knight's April 2021 Originations Market Monitor report?

The report highlighted an 11.3% decline in overall rate lock volumes and a 45% share of refinancing in origination activity.

How did refinancing activity change according to Black Knight's report for April 2021?

Refinancing activity saw a significant drop, with rate/term refinances down 34% year-over-year and the lowest volume since January 2020.

What is the impact of interest rates on mortgage origination activity as per Black Knight's report?

Despite decreasing interest rates, borrower engagement has not increased, leading to a reduced rate lock volume.

How many homeowners could potentially benefit from refinancing according to Black Knight?

Approximately 14.5 million homeowners could qualify for refinancing, despite the current low engagement.