According to Black Knightâs Originations Market Monitor Report, mortgage originations fell in April, reaching their lowest level since May 2020 and the lowest rate/term refi lending volume since last January. The report considered mortgage origination data through April 2021 month-end.
âDespite interest rates trending downward in April across all mortgage products, the decreases did not seem to be enough to bring borrowers â particularly refi borrowers â back to the table,â Black Knight Secondary Marketing Technologies President Scott Happ said in a release. âApril saw the lowest overall rate lock volume since May 2020, with rate/term refinance lending the lowest since January 2020 before the 10-year Treasury yield fell below 1 percent for the first time ever, setting off a yearlong run of interest rates hitting 14 separate record lows in 2020.â
While Black Knightâs Optimal Blue Mortgage Market Indices (OBMMI) showed the average conforming 30-year interest rate at 3.17 percent, overall lock volume was down 11.3 percent, with a 6 percent decrease in purchase locks, a 13 percent decrease in cash-out locks, and 20 percent decrease in rate/term refinance locks since the month before.
Additionally, the refinance share of market activity fell 3 percent month-over-month, 45 percent from 48 percent. In a year-over-year analysis, rate/term refinances were down 34 percent since April 2020, and cash-outs and purchase loans were up 27 percent and 114 percent, respectively.
âAs volume has tightened, weâve seen average credit scores decline across all products and purposes, and conventional loans lose share to government-backed mortgages,â Happ continued. âNeither are unexpected developments given that, when rates begin to rise, higher-credit borrowers tend to simply not engage. Right now, though, rates are still hovering in a historically comfortable place, with approximately 14.5M homeowners who could still likely qualify for and benefit from a refinance. It will be interesting â and telling â to see both how rates move in the coming weeks, and whether or not we see refi volumes increase as a result.â