Black Knight Originations Market Monitor: Mortgage Locks Edge Lower in June While Credit Availability Continues to Tighten

Rhea-AI Summary

The Optimal Blue Mortgage Market Indices showed a rise in 30-year conforming rates in June. Overall rate lock volumes were down, but conforming loans gained share. Purchase lock counts were significantly lower compared to last year and pre-pandemic levels. The average purchase price continued to rise, while the average loan amount remained flat. Credit scores also increased, with the average credit score among purchase locks reaching a record high. The adjustable-rate mortgage share decreased, and the 10-year Treasury yield rose.

Positive

• 30-year conforming rates rose by 6 basis points in June.
• Conforming loans gained share.
• The average purchase price rose for the seventh consecutive month.
• Credit scores increased, with the average credit score among purchase locks hitting a record high.
• The 10-year Treasury yield rose by 17 basis points in June.

Negative

• Overall rate lock volumes were down by 1%.
• Purchase lock counts were down by 31% year over year and 29% compared to pre-pandemic levels.

• The Optimal Blue Mortgage Market Indices (OBMMI) showed 30-year conforming rates rose 6 basis points in June to 6.78%
• Overall rate lock volumes were down 1% month over month in June, with conforming loans gaining share mainly at the expense of nonconforming loan products
• Purchase lock counts were down 31% year over year and 29% compared to pre-pandemic levels in 2019, as higher interest rates and low inventories continued to have a chilling effect on demand
• While purchase lending remains constrained, it continues to drive the overwhelming majority of volume, accounting for more than 88% of June rate locks – a record high
• The average purchase price rose for the seventh consecutive month to $457K, while the average loan amount remained flat at $360K
• Credit scores rose across the board again in June – as economic uncertainty, tightening credit and affordability concerns continued to skew the market toward higher-credit borrowers
• At 735, the average credit score among purchase locks hit a record high in June, with the average credit score among rate/term refinances jumping 7 points in the month
• The adjustable-rate mortgage (ARM) share of June lock activity fell to 7.38%
• The 10-year Treasury yield rose 17 basis points in June to 3.81%, as the spread with mortgage rates remains historically wide at 2.97%

JACKSONVILLE, Fla., July 12, 2023 /PRNewswire/ -- Today, Black Knight, Inc. (NYSE: BKI) announced the release of its latest Originations Market Monitor report, looking at mortgage origination data through June 2023 month-end. Leveraging daily rate lock data from the Black Knight Optimal Blue PPE, the Originations Market Monitor provides the industry's earliest and most comprehensive view of origination activity.

"As May gave way to June, we saw banks lose some of their appetite for jumbo loans," said Andy Walden, vice president of enterprise research and strategy at Black Knight. "While the OBMMI 30-year conforming index rose 6 basis points over the month, the jumbo rate index was up by three times that level. Purchase loans continue to claim a larger share of a shrinking origination pipeline, as refinance opportunities remain scarce. Indeed, we saw the purchase lending share of June's locks hit another all-time high. But keep in mind: It is a dominant share of a very constrained market."

The month's pipeline data showed rate lock activity fell across the board, edging lower by 1% overall on a month-to-month basis, with purchase locks down a scant 0.6%, cash-out refinances falling 1.4% and rate/term refinance locks off by almost 17%. Purchase locks accounted for 88.4% of locks in June, the highest share on record. Even so, purchase lock counts were down 31% year over year and 29% compared with pre-pandemic levels in 2019.

"As we noted in our most recent Mortgage Monitor report, the housing market has been reheating as we approach the traditional tail end of the homebuying season," Walden said. "What's clear is that continued economic uncertainty, tightening credit and affordability concerns have all helped to skew the market toward higher-credit borrowers. In fact, the average credit score among purchase locks hit a record high in June. Likewise, the average purchase price rising for the seventh straight month, while the average loan amount remained flat, suggests lower loan-to-value ratios as well."

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 June'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 happened to 30-year conforming rates in June?

30-year conforming rates rose by 6 basis points in June.

How did conforming loans perform?

Conforming loans gained share.

What happened to purchase lock counts in June?

Purchase lock counts were down by 31% year over year and 29% compared to pre-pandemic levels.

What were the average purchase price and loan amount in June?

The average purchase price continued to rise, while the average loan amount remained flat.

What happened to credit scores in June?

Credit scores increased, with the average credit score among purchase locks hitting a record high.

What happened to the adjustable-rate mortgage share?

The adjustable-rate mortgage share decreased.

What happened to the 10-year Treasury yield in June?

The 10-year Treasury yield rose by 17 basis points in June.