Black Knight Originations Market Monitor: Origination Activity Down 6% in October as Locks on Rate/Term Refinance Mortgages Drop Another 23%

Rhea-AI Summary

Black Knight, Inc. (NYSE:BKI) released its October 2021 Originations Market Monitor, revealing a significant decline in mortgage origination activity. Rate/term refinance locks plummeted over 23% month-over-month, reaching a 63% drop compared to the previous year. Overall rate locks fell by 5.9%, primarily due to a sharp decrease in rate/term refinances, which dropped to the lowest market share since June 2021. While cash-out refinancing remained relatively stable, it still reflected a broader shift towards equity-centric refinancing, spurred by over $9 trillion in tappable equity available to borrowers.

Positive

• Cash-out refinance volumes are up nearly 33% year-over-year.
• Conforming loan products gained market share.

Negative

• Overall rate locks fell by 5.9% from September.
• Rate/term refinance locks are down 62.5% compared to last year.
• Refinance market share declined to 45%, the lowest since June 2021.

JACKSONVILLE, Fla., Nov. 8, 2021 /PRNewswire/ -- Today, Black Knight, Inc. (NYSE:BKI) announced the release of its latest Originations Market Monitor report, looking at mortgage origination data through October 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.

"The ongoing decline in rate/term refinance locks picked up pace in October as 30-year rates continue to rise," said Black Knight Secondary Marketing Technologies President Scott Happ. "In fact, locks on rate/term refinance loans were down by more than 23% since last month and are now almost 63% off where they were this time last year. Back then, 30-year rate offerings hovered in the 2.8-2.9% range, whereas our OBMMI daily interest rate tracker showed October's month-end conforming 30-year rate at 3.27%. Jumbo offerings, on the other hand, have risen more slowly over the past three months and ended October nearly 10 basis points below conforming rates."

The month's pipeline data showed overall rate locks were down 5.9% from September, driven by a 23.3% month-over-month drop in rate/term origination activity. The month's decline puts rate/term refinance lending down 62.5% off last October's level and has resulted in the overall refinance share of the market mix falling to just 45%, the lowest it's been since June 2021. Locks on both cash-out refinance (-0.3%) and purchase loans (+0.4%) held relatively steady for the month. Despite the marginal decline, cash-out lock volumes are still up nearly 33% from this time last year. Average credit scores on both cash-out and rate/term refinances ticked down two points in October as higher credit borrowers tend to sit on the sidelines of a rising rate environment. Conforming loan products gained back market share, while government products lost ground.

"As Black Knight noted in our most recent Mortgage Monitor report, the dynamics of the refinance market are changing, with a sharp shift away from rate/term refis to cash-out lending," Happ continued. "This shift tends to happen in any rising rate environment, never mind one in which American mortgage holders have more than $9 trillion in tappable equity available to them. While we did see cash-out locks tick down in October, the overall trend toward an equity-centric refi market remains strong and one we will continue to watch closely in the coming months."

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 October's origination activity can be found in the full Black Knight Originations Market Monitor report located here.

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 did Black Knight (BKI) report about mortgage origination activity in October 2021?

Black Knight reported a 5.9% decline in overall mortgage origination activity and a 23% drop in rate/term refinance locks for October 2021.

How much did rate/term refinance locks decrease in October 2021 for Black Knight (BKI)?

Rate/term refinance locks decreased by more than 23% month-over-month in October 2021.

What is the current market share for refinance lending according to Black Knight (BKI)?

The refinance share of the market mix has dropped to 45%, the lowest since June 2021.

What trends did Black Knight (BKI) observe in cash-out refinancing in October 2021?

Cash-out refinances remained steady, despite a slight decline, reflecting a shift towards equity-centric lending.

What interest rate was reported by Black Knight (BKI) for conforming loans at the end of October 2021?

The conforming 30-year interest rate reported by Black Knight at the end of October 2021 was 3.27%.