Volume Jumps Up In March As Compared To One Month Prior On Seasonal Tailwinds
Black Knight, Inc. (NYSE:BKI) has released its latest Originations Market Monitor report, looking at mortgage origination data through March 2023 month-end. Leveraging daily rate lock data from the Black Knight Optimal Blue PPE. Here’s what the report concluded:
“This continues to be an incredibly rate-sensitive housing market, and March’s rate lock activity perfectly illustrates this dynamic,” said Andy Walden, vice president of enterprise research at Black Knight. “Early in the month, when rates started their climb back toward 7% – reaching 6.8% in the process – we saw pronounced downward pressure on originations. In the wake of uncertainty in the banking sector and investors’ flight to the safe haven of U.S. Treasuries, rates came down roughly a quarter of a point. The result? Another quick surge in originations, particularly in the purchase market.”
The month’s pipeline data showed overall rate lock dollar volume up 43% over February, with purchase locks rising 44%, cash-out refinances up 31% and even rate/term refis, which had been hovering near historic lows, up 36%. Despite the rebound, refinance locks fell to just 13% of the month’s activity, a new low for this cycle, due to the disproportionate rise in purchase locks.
“It is not unusual for rate locks to surge in March ahead of the spring homebuying season, although this year’s rise outpaced what we typically see on a seasonal basis,” Walden continued. “A cooling market lacking the multiple bids and all-cash offers of the recent past has made sellers more receptive to FHA offers. That, combined with a recent reduction in FHA mortgage insurance premiums and a mid-month increase in the FHA-to-conforming spread, made FHA loans comparatively more attractive. FHA share increased to more than 20% of the pipeline in March, up from 18% at the beginning of the year and 12% a year ago.”
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 March’s origination activity can be found in the full Black Knight Originations Market Monitor report.
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