Black Knight Originations Market Monitor: Rate Locks Rise After Two Consecutive Monthly Declines; Both Purchase and Cash-Out Refinance Lending Up in June

Rhea-AI Summary

Black Knight, Inc. (NYSE:BKI) released its Originations Market Monitor for June 2021, showcasing a 3.9% increase in overall rate locks compared to May. Purchase locks rose by 6%, and cash-out refinance locks jumped by 10%. However, rate/term refinances fell by 4%, leading to a decreased share of refinances at 43% of origination activity. The report highlights ongoing changes in borrower behavior amidst record home price growth, with the conforming loan share declining by nearly 750 basis points year-over-year. More detailed metrics are available in the full report.

Positive

• Overall rate locks increased by 3.9% from May.
• Purchase locks rose by 6%, indicating strong purchase lending activity.
• Cash-out refinance locks increased by 10%, reflecting a healthy refinance market.

Negative

• Rate/term refinances declined by 4%, reducing their market share to 43%.
• Rate/term refinances are down 30% since early March and 60% since January.

JACKSONVILLE, Fla., July 12, 2021 /PRNewswire/ -- Today, Black Knight, Inc. (NYSE:BKI) announced the release of its latest Originations Market Monitor report, looking at mortgage origination data through June 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 an initial rise following the Fed's policy meeting in mid-June, Black Knight's OBMMI daily interest rate tracker shows rate offerings settling in the second half of the month and now sitting roughly equivalent to where they were at the same time in May," said Black Knight Secondary Marketing Technologies President Scott Happ. "Following two consecutive months of declines – and during the typical seasonal peak for purchase lending, no less – overall locks climbed in June. Both purchase and cash-out refinances were up, but refis in which the homeowner improves their rate or term continued their downward slide, despite rates returning to levels last seen in early March. Such rate/term refis are now down 30% from that point and 60% since January."

The month's pipeline data showed that overall rate locks were up 3.9% from May, with a 6% rise in purchase locks and a more pronounced 10% jump in cash-out refinance locks. The purchase lock rise also comes after two consecutive months of declines, with May's drop primarily due to the foreshortened month. While the volume of purchase loan locks per day was down slightly from May, they rose for the month due to the three additional business days in June, putting purchase activity just 5% behind March's record high. On the other hand, locks for rate/term refinances were down 4%, causing the refinance share of the market mix to drop again, accounting for just 43% of June's origination activity.

"A recent Black Knight analysis found that borrower behavior and market make-up is changing in the face of continued, record-breaking home price appreciation," Happ continued. "This tracks with the continued, growing jumbo share of lending in the market and the decline in the conforming share a result. Indeed, the conforming share of lending is down nearly 750 basis points from last year. With rates holding steady and purchase lending strong, additional growth in home prices may extend this trend further."

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 are Black Knight's latest mortgage origination trends for June 2021?

In June 2021, Black Knight reported a 3.9% increase in overall rate locks, with purchase locks up 6% and cash-out refinance locks up 10%.

How much have rate/term refinances changed according to Black Knight's June report?

Rate/term refinances decreased by 4% in June, down 30% from early March.

What was the refinance share of the market in June 2021 for Black Knight?

The refinance share of the market fell to 43% in June 2021.

What does Black Knight's analysis indicate about borrower behavior?

Black Knight's analysis shows changing borrower behavior due to significant home price appreciation and a declining conforming loan share.