The latest Mortgage Monitor Report from the Data & Analytics division of Black Knight Inc. suggests that once the numbers are crunched, the third quarter of 2020 is likely to break quarterly records in terms of mortgage refinance, purchase and total lending volumes.
In fact, total lending volume for the year is heading toward $4 trillion for the first time in history.
“Rate lock data from Black Knight’s Compass Analytics division shows that Q3 2020 mortgage originations are on track to break quarterly records across the board and remain strong moving into Q4,” says Ben Graboske, president of Black Knight Data & Analytics.
” September lock activity held relatively level with August, but through October 19, lock activity overall is up four percent from the month prior – with purchase locks up six percent and refinance locks up three percent thus far,” he adds. “Interest rates setting new record lows in mid and late October will likely continue to fuel lock activity in coming weeks.”
The report also found that despite heavy, pandemic-related headwinds earlier in the year, home price appreciation has remained robust. The annual home price growth rate had slowed to 0% in May – the first time home prices were flat year-over-year since early 2012 – but have since skyrocketed, driven by record low rates, improved affordability and a severe shortage of available inventory.
According to daily home price tracking data from Black Knight’s Collateral Analytics group, after seeing annual home price growth of 11.5% in August, annual appreciation accelerated to a startling 14.2% in September – the highest such growth rate in more than 15 years.
“Estimated origination volumes based on underlying locks suggest both Q3 refinance and total originations could be up 25 percent or more from Q2, while purchase lending could be up by 35 percent or more,” according to Graboske. “This would push 2020 purchase lending to the highest level since 2005, and both refinance lending and total origination volumes to their highest levels ever.”
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