Mortgage Rates

Price Locks Down Throughout All Mortgage Merchandise


Despite very low and constant mortgage rates, general interest freezes – especially interest / term refinancing – declined across the board in May, according to the latest report by the Black Knight Originations Market Monitor, mainly due to low inventory levels.

“While interest rates on all mortgage products were down in May, the overall rate locks were still down,” said Black Knight Secondary Marketing Technologies President Scott Happ. “The severity of the inventory holdings for sale seems to be a major driver of the 3.4% decrease in purchase locks since April, but the decline in refinance locks seems to have more to do with the psychology of borrowers, something of that There is excitement in the market, but despite the refinancing incentives that have increased significantly since then, refinancing activity has simply not recovered as expected. “

May data showed a 4.7% decrease from April for general interest rate freezes. According to the report, refinancing freezes fell by a more pronounced 8.2%.

The refinancing share of the market fell in May to 44% of the month’s issuing activity. On an annual basis, only interest / term refinancing loans decreased compared to last April (minus 45%), while both disbursements and purchase loans increased by 32% and 43% year-on-year, respectively.

“As interest rates fell from March to May, refinancing incentives rose 15%,” continued Happ. “This increased the number of high-quality refi candidates on the market to over 14 million at the end of May, but the volume of fixed interest rates could not keep pace. The interest freezes on refinancing have instead decreased by 27% over the same period, which is slowing at a time when there would otherwise be an expected acceleration. “

What follows are some more key takeaways from the May Activity Report, which is fully available here on the Black Knight website.

  • The average loan amount in May has increased $ 6,000 to $ 316,500, likely a function of a growing jumbo share of lending alongside the appreciation in home prices
  • Although the number of highly qualified refinancing candidates rose from 12 to over 14 million between March and May, an increase of 15%, the actual refinancing rate freezes fell by 27% over the same period.
  • Black Knight’s daily OBMMI interest tracker showed the end-of-month average at 3.15%, 2 basis points (bps) from April and 7 bps since late February