Black Knight: 2016 Originations Were Highest In Nine Years

A strong fourth-quarter finish pushed total 2016 origination volumes to the highest level seen in nine years, according to Black Knight Financial Services’ Mortgage Monitor report.

Mortgage lenders originated $2.1 trillion in first-lien mortgages in 2016 – an increase of 17% compared with 2015. Much of this was driven by refinances, which increased 22% compared with the previous year. Purchase originations increased 13%, according to the firm’s data.

“We’ve now seen nine consecutive quarters of double-digit purchase origination growth and growth overall in the purchase market in 21 of the past 22 quarters,” says Ben Graboske, executive vice president of data and analytics for the firm, in a release.

He adds that 2016 “was the second straight year of double-digit growth in purchase lending, which hit its highest yearly total since 2006 at $1.1 trillion.”

Still, purchases were down 28% compared with the peak volume seen in 2005.

The nearly $300 billion in refinance originations in the fourth quarter marked a 58% increase over the fourth quarter of 2015, according to the report.

“The refinance market topped $1 trillion in 2016, driven by a year of historically low rates,” Graboske says, adding that refinance origination volumes were “the highest of any quarter since the second quarter of 2013.”

“However, as Black Knight reported in our First Look at January’s mortgage performance data, prepayment speeds – historically a good indicator of refinance activity – fell by 30 percent from December to January,” Graboske adds. “When you couple this with the fact that there are 5.7 million, or nearly 70 percent, fewer refinance candidates in the market entering the first quarter of 2017 than there were entering the fourth quarter of 2016, it becomes very likely that we will see these numbers decline significantly in the first quarter.”


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