Black Knight Originations Market Monitor: With Mortgage Interest Rates at Highest Point Since Great Recession, Rate Lock Activity Fell Across the Board in April

Rhea-AI Summary

Black Knight, Inc. (NYSE:BKI) revealed its latest Originations Market Monitor, highlighting a sharp rise in conforming 30-year mortgage rates to 5.42%, the highest level in nearly 13 years. Overall rate-lock activity plunged by 20% from March, driven by a notable 50% decrease in rate/term refinance activity. The cash-out refinance locks also fell 40%, resulting in a record low refi market share of 20%. Despite an 11% decline in purchase locks from March, year-over-year metrics remained steady, indicating ongoing demand.

Positive

• Government-backed lending increased as FHA and VA locks gained market share.
• Purchase locks remained flat year-over-year, showing consistent demand from homebuyers.

Negative

• Overall rate-lock volumes dropped by 20% from March.
• Rate/term refinance activity fell sharply by 50%.
• Cash-out refinance locks decreased by 40%, indicating reduced equity extraction.
• Refinance market share plummeted to 20%, the lowest since January 2018.
• Pull-through rates for refinance locks fell to 62.7%.

• Black Knight's Optimal Blue Mortgage Market Indices tracked the steep ascent of conforming 30-year rates, which finished the month at 5.42%, eclipsing recent peaks to hover at their highest point in nearly 13 years
• Rate-lock production reflected the current rate environment with overall volumes dropping 20% from March, led by yet another sharp drop (-50%) in rate/term refinance activity
• Cash-out refinance locks fell 40% from last month as homeowners likely look for other avenues (HELOCs, 2^nd liens, etc.) to access tappable equity without sacrificing historically low first-lien mortgage rates
• The combined decline in refinance locks pushed the refi share of the market down to just 20% in April, the lowest point on record since at least January 2018, when Optimal Blue began tracking the metric
• While purchase locks fell 11% from March, they remained flat on a year-over-year basis, indicating consistent and resilient demand from homebuyers
• Government-backed lending picked up in April as FHA and VA locks captured market share from conforming products
• Credit scores were flat for purchases and ticked higher for rate/term refis; however, cash-out credit scores fell 8 points on average as higher-credit score borrowers move to the sidelines

JACKSONVILLE, Fla., May 9, 2022 /PRNewswire/ -- Today, Black Knight, Inc. (NYSE:BKI) announced the release of its latest Originations Market Monitor report, looking at mortgage origination data through April 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.

"Mortgage interest rates continued their steep ascent in April, with our OBMMI daily interest rate tracker showing 30-year conforming offerings, which finished the month at 5.42%," said Scott Happ, president, Optimal Blue, a division of Black Knight. "To put that in perspective, in the last few weeks, we've blown through the recent peak seen in 2018 and are now hovering at or near the highest interest rates we've seen since the Great Recession."

The month's pipeline data showed overall rate locks down 20.3% month-over-month, driven by a steep 50% drop in rate/term refinance lending activity. Cash-out refinance locks also fell, coming in 40% below March levels. The combined decline in refinance locks pushed the refi share of the market down to just 20%, the lowest point on record since at least January 2018, when Optimal Blue began tracking the metric. Government loan products gained market share as FHA and VA lock activity increased at the expense of agency volumes. Pull-through rates – the share of locks that result in funded loans – continued to fall on both purchase and refinance locks, with refi pull-through falling to just 62.7%.

"Seen in the light of such quick and sharp rises in 30-year rates, April's declines in rate lock activity – though bracing – are hardly surprising," Happ continued. "That's particularly true of refinance locks when half of all mortgage holders have current first lien rates below 3.5%. That being said, while purchase locks were down somewhat from March, they remained flat from last April, reflecting consistent and resilient demand from homebuyers."

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 April'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 recent mortgage rate trends did Black Knight report for BKI?

Black Knight reported that conforming 30-year mortgage rates reached 5.42%, marking the highest level in nearly 13 years.

How did the rate lock activity for BKI change in April 2022?

Rate lock activity fell by 20% in April 2022, driven by a significant 50% decline in rate/term refinance activity.

What percentage of the market did refinancing constitute for BKI in April 2022?

Refinancing accounted for just 20% of the market share in April 2022, the lowest since January 2018.

Did purchase locks show any notable changes for BKI in April 2022?

Purchase locks declined by 11% from March 2022 but remained flat compared to April 2021, indicating stable demand.

What impact did the rise in mortgage rates have on refinancing for BKI?

The sharp increase in rates resulted in a steep decline in rate-lock activity for refinancing, significantly impacting the market.