Black Knight: Rate Lock Activity Fell Across The Board In April

Black Knight, Inc. (NYSE:BKI) released 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, 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 finishing 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.