Black Knight Originations Market Monitor: Overall Rate Lock Volume Up 1.3% in August, Driven Largely by 7.6% Increase in Cash-Out Refinance Activity

Rhea-AI Summary

On September 13, 2021, Black Knight (NYSE:BKI) released its Originations Market Monitor report for August 2021. The report reveals that interest rates hovered around 3.05%, leading to a surge in mortgage refinances, especially cash-out refis, which increased by 7.6%, driving overall rate locks up by 1.3% from July. The refinance share surpassed 50% for the first time since February, fueled by a significant rise in tappable equity, now averaging $173,000 per homeowner. The report highlights the potential for future growth in cash-out lending amidst rising home prices.

Positive

• Overall rate locks increased by 1.3% from July.
• Cash-out refinance activity surged by 7.6%, up over 41% in three months.
• Refinance share of the market surpassed 50% for the first time since February.
• Average tappable equity per homeowner is now $173,000, indicating potential for cash-out lending growth.

Negative

• Purchase loan locks declined by 0.8%, reflecting pressure from rising home prices and low inventory.

JACKSONVILLE, Fla., Sept. 13, 2021 /PRNewswire/ -- Today, Black Knight, Inc. (NYSE:BKI) announced the release of its latest Originations Market Monitor report, looking at mortgage origination data through August 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.

"After starting the month below 3%, interest rates spent much of August hovering just above that point, with the conforming 30-year at 3.05% at month's end, according to our OBMMI daily interest rate tracker," said Black Knight Secondary Marketing Technologies President Scott Happ. "That sub-3% period seems to have been enough to spur some high-credit-score and high-balance borrowers to refinance, as average credit scores rose along with the non-conforming share of the market."

The month's pipeline data showed that overall rate locks were up 1.3% from July, driven by a 7.6% increase in cash-out activity. The month's rise puts cash-out refinance lending up more than 41% over the last three months. The increase in cash-out activity was enough to push the overall refinance share of the market mix back above 50% for the first time since February even with rate/term lending remaining essentially flat (-0.5%). Locks on purchase loans stayed roughly flat as well, ticking down 0.8% from July as rising home prices and constrained for-sale inventory continue to put downward pressure on purchase lending volumes.

"The rise in cash-out lending is hardly surprising given the extraordinary growth we've seen in tappable equity this year," Happ continued. "We've now seen cash-out activity increase for three consecutive months, and with $173,000 in equity available to the average homeowner with a mortgage and home prices still climbing, there is still room in the market for growth. With equity levels at record highs and interest rates broadly expected to tick upward in coming years, cash-out lending is likely to play a much larger part in the overall refinance market."

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 August'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 is the latest update from Black Knight regarding mortgage origination?

Black Knight's latest Originations Market Monitor report indicates a 1.3% increase in overall rate locks for August 2021.

How much did cash-out refinance activity increase in August 2021?

Cash-out refinance activity rose by 7.6% in August 2021.

What is the average tappable equity available to homeowners according to Black Knight?

The average tappable equity available to homeowners is $173,000.

What trend was observed in purchase loan locks in August 2021?

Purchase loan locks saw a decline of 0.8% from July 2021.