Overall rate locks fell 4.7% in November compared with October, driven by a 9.4% drop in rate/term origination activity, according to Black Knight’s latest Originations Market Monitor report.
It was the third consecutive monthly decline in overall origination volume, bringing it to its lowest level since February 2020, prior to the onset of the pandemic.
Playing a key role was volatility in mortgage interest rates, which rose and fell during November.
“While 30-year rates ended November relatively flat from where they were at the start of the month, there was some volatility in rate offerings throughout the month,” says Scott Happ, president of Secondary Marketing Technologies for aid Black Knight, in the report. “Rates moved up and down within a roughly 21 basis point range throughout the month as the market digested news of both the Fed’s tapering announcement and the new Omicron variant. Indeed, our OBMMI daily interest rate tracker showed average offerings reaching as high as 3.36 percent in the week leading up to Thanksgiving before settling.”
While this was the third consecutive monthly decline, rate/term refinance lending has actually fallen in eight of the 11 months of 2021 thus far and is now down 65% from November 2020.
The overall refinance share of the market mix remained at 45%, the lowest it’s been since June 2021.
Locks declined across the board, with cash-out refinances down 2.5% and purchase loans down 3.9%.
Despite the monthly decline, cash-out lock volumes are still up nearly 36% from this time last year and continue to be buoyed by ongoing home price growth.
“While the rate of home price growth has slowed, it is still historically quite robust,” Happ says. “As a result, we continue to see non-conforming jumbo loan products gain market share at the expense of agency volumes. With higher conforming loan limits announced by the FHFA taking effect at the start of 2022, it will be interesting to see to what degree this trend persists. As it is, the average loan amount rose another $7,000 to reach $337,000 in November.”
The report leverages daily rate lock data from Black Knight’s Optimal Blue PPE.
Photo: Georg Bommeli
