Black Knight Originations Market Monitor: Driven by a Rise in Purchase Loans, Overall Rate Locks Up 19% in March Despite 70 Basis Point Rate Jump in the Month

Rhea-AI Summary

In March, mortgage interest rates surged, with 30-year conforming rates climbing to 4.93% before settling at 4.79%. The rise in mortgage rates led to a 19% increase in overall rate lock activity, primarily driven by a 31% jump in purchase volume. Non-conforming loan products gained market share, now accounting for 18% of lock activity. However, rate/term refinance volumes dropped 15.4%, marking an 81% year-over-year decline, and the refi market share fell to 28%, the lowest since November 2018.

Positive

• Overall rate lock activity increased by 19% in March.
• Purchase volume surged by 31%, indicating strong demand.
• Non-conforming loan products captured 18% of the market in March.

Negative

• Rate/term refinance volumes decreased by 15.4%, representing an 81% year-over-year decline.
• Refinance market share dropped to 28%, the lowest since November 2018.

-- Black Knight's Optimal Blue Mortgage Market Indices tracked conforming 30-year rates daily throughout March as they topped 4.9% before pulling back and finishing the month at 4.79%

-- The spread between mortgage rates and 10-year Treasuries climbed another 20 basis points as the rise in mortgage rates outpaced the ~50 basis point rise in Treasury yields

-- Overall rate lock activity rose 19% from January, driven by a 31% increase in purchase volume, which is now up nearly 70% over the past three months

-- Cash-out locks were mostly flat (+1.6%) while rate/term refinance volumes continued to contract, falling another 15.4% in March for an 81% year-over-year 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

-- With home price growth continuing to set records, non-conforming products captured additional market share in March and now account for 18% of lock activity

-- Likewise, upward pressure on home prices pushed the average loan amount up another $8,000 to just under $362,000

JACKSONVILLE, Fla., April 11, 2022 /PRNewswire/ -- Today, Black Knight, Inc. (NYSE: BKI) 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."

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 March'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                                                                                         
904.854.5043                                                                                             
michelle.kersch@bkfs.com

Mitch Cohen  
704.890.8158
mitch.cohen@bkfs.com

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SOURCE Black Knight, Inc.

FAQ

What were the mortgage rates in March for BKI?

In March, 30-year conforming mortgage rates peaked at 4.93% before closing at 4.79%.

How much did overall rate lock activity change in March for BKI?

Overall rate lock activity increased by 19% from January.

What was the status of refinance volumes for BKI in March?

Rate/term refinance volumes fell 15.4% in March, an 81% decline year-over-year.

What is the current market share for non-conforming loans for BKI?

Non-conforming products accounted for 18% of lock activity in March.

How did purchase lock volumes perform in March for BKI?

Purchase lock volumes increased by 31% in March compared to February.