Black Knight Originations Market Monitor: Mortgage Production Continues to Decline With Purchase Demand Now Falling Below Pre-Pandemic Levels
Black Knight, Inc. (NYSE: BKI) reported a decline in mortgage origination activity, with July seeing a 14.4% drop in total lock volumes compared to June. The 30-year mortgage rates slightly decreased to 5.3%, a decline of 49 basis points. Purchase locks fell 25.8% year-over-year, marking the first month below pre-pandemic levels. The average purchase price decreased by $10,000 to $344,000, while the average borrower credit score for cash-out refinances reached 692, the lowest since 2013.
- 30-year mortgage rates fell to 5.3%, down 49 basis points.
- Government-backed loans gained market share.
- Total lock volumes dropped 14.4% from June.
- Purchase lock count down 25.8% year-over-year, first below pre-pandemic levels.
- Average purchase price decreased by $10,000, affecting affordability.
- Cash-out refinance activity down 67.2% year-over-year.
- Refinance market share at the lowest point since January 2018.
- Black Knight's Optimal Blue Mortgage Market Indices tracked 30-year rates as they pulled back to finish the month at
5.3% , a drop of 49 basis points (bps) from June - Total lock volumes were down
14.4% from June, with declines seen in both rate/term (-16.9% ) and cash-out (-14.1% ) refinances as well as purchase loans (-14.3% ), which accounted for82% of all lock activity - The purchase lock count, which excludes the impact of soaring home values on volume, is off
25.8% from last year and11% from 2019, marking the first month the number of purchase locks has fallen below pre-pandemic levels, as affordability challenges continue to cool the housing market - The average purchase price among homes being financed fell by another
$10,000 (-2.2% ) in July and is now down by more than$31 K (-6.6% ) since March as rising interest rates have eroded buying power and affordability in recent months - Conventional and government-backed (FHA and VA) locks captured additional market share from non-conforming products, a trend also likely reflected by a further decline in the average loan amount
- The average borrower credit score on cash-out refinances edged slightly lower to 692, reaching the lowest point since Optimal Blue began tracking the metric in 2013
JACKSONVILLE, Fla., Aug. 8, 2022 /PRNewswire/ -- Today, Black Knight, Inc. (NYSE: BKI) announced the release of its latest Originations Market Monitor report, looking at mortgage origination data through July 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 originators continue to experience strong headwinds," said Scott Happ, president of Optimal Blue, a division of Black Knight. "Rate lock activity has been down four straight months, with declines across all loan purpose types. Purchase mortgages, which currently account for
The month's pipeline data showed overall rate locks down
"Although 30-year interest rates actually pulled back slightly in July, the originations market is still reacting to previous increases and continuing affordability challenges," Happ continued. "As we reported in our recent Mortgage Monitor report, home prices have begun to pull back in some of the hotter home markets, particularly those on the West Coast. With the end of the traditional homebuying season approaching, we will be watching this trend closely."
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 July'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/.
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SOURCE Black Knight, Inc.
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