Black Knight Originations Market Monitor: Rate Lock Volume Up 5.5% in July as Interest Rates Fall Back Below 3%; Refinance Activity Sees Largest Rise

Rhea-AI Summary

Black Knight, Inc. (NYSE:BKI) released its Originations Market Monitor, revealing mortgage origination data through July 2021. As the Delta variant raised market uncertainty, the 10-year Treasury yield fell, driving July's conforming 30-year mortgage rates down to 2.99%, 17 basis points lower than June. Rate locks increased by 5.5%, with refinance locks rising 24% and cash-out refinances up 20%. However, purchase loan locks dropped 7% due to rising home prices and limited inventory. The refinance market returned to a 50% share, aided by the FHFA's repeal of the adverse market fee.

Positive

• Conforming 30-year mortgage rates fell to 2.99%, encouraging refinancing.
• Rate locks increased by 5.5%, indicating strong origination activity.
• Refinance locks surged 24%, suggesting robust homeowner interest.
• Cash-out refinance locks rose by 20%, signaling increased market activity.
• Refinance market share returned to 50%, benefiting from favorable regulatory changes.

Negative

• Purchase loan locks decreased by 7%, impacted by high home prices and limited inventory.

JACKSONVILLE, Fla., Aug. 9, 2021 /PRNewswire/ -- Today, Black Knight, Inc. (NYSE:BKI) announced the release of its latest Originations Market Monitor report, looking at mortgage origination data through July 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 market's uncertainty around rising Delta variant caseloads across the U.S. has helped push yields on the 10-year Treasury down to their lowest level since February," said Black Knight Secondary Marketing Technologies President Scott Happ. "This has, in turn, put downward pressure on mortgage interest rates, with our OBMMI daily interest rate tracker showing July's month-end conforming 30-year at 2.99%, 17 basis points lower than the month prior."

The month's pipeline data showed that overall rate locks were up 5.5% from June, with both rate/term and cash-out refinance locks seeing significant monthly growth, rising 24% and 20% respectively. The increase in activity was strong enough to push the refinance share of the market mix back up to 50% for the first time in five months. Conversely, locks on purchase loans pulled back in July, falling 7% from June as rising home prices and constrained for-sale inventory continue to put downward pressure on purchase lending volumes. Average credit scores were up as well in July as higher-credit borrowers, who historically tend to react more quickly and strongly to refinance opportunities, reentered the market.

"When the FHFA announced the repeal of its adverse market fee for refinances in mid-July on top of already falling 10-year Treasuries, we saw interest rates tick down below 3% within days," Happ continued. "And while we didn't see homeowners looking to refinance react as quickly or as strongly to such slight rate movements in the past few months, they certainly did so in July. The mid-month surge was pronounced, but short-lived, suggesting that crossing the 3% threshold was what borrowers were waiting for before acting, and when rates ticked back above that psychological line, they held back on the sidelines once again. Now that rates are again below 3%, a very early look at August lock data suggests more of the same in the month's earliest days."

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 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 does the July 2021 Originations Market Monitor report by Black Knight indicate about mortgage rates?

The July 2021 report shows conforming 30-year mortgage rates dropped to 2.99%, influenced by lower 10-year Treasury yields.

How much did overall rate locks increase according to Black Knight's report?

Overall rate locks increased by 5.5% from June to July 2021.

What was the market share of refinances in July 2021?

Refinances accounted for 50% of the market share in July 2021.

How did purchase loan locks perform in July 2021?

Purchase loan locks fell by 7% in July 2021 due to rising home prices and constrained inventory.

What was a significant regulatory change mentioned in the report?

The FHFA's repeal of the adverse market fee for refinances in mid-July 2021 stimulated refinancing activity.