Price Growth Bucks Downward Trend, Rises Across The Nation

Home prices appear to have bucked their downward trend, rising almost everywhere in the U.S. in March. Black Knight’s latest Mortgage Monitor report found that home prices rose last month on both non-adjusted (+1.38%) and seasonally adjusted (+0.45%) bases. This is the third consecutive month of increases recorded by Black Knight, with 92% of markets seeing prices increase.  “[J]ust five months ago, prices were declining on a seasonally adjusted month-over-month basis in 92% of all major U.S. markets. Fast forward to March, and the situation has done a literal 180,” said Black Knight Vice President of Enterprise Research Andy Walden. Other than Western and pandemic boomtown markets, 40% have seen prices return to peak levels, with only Austin (-0.7%), Salt…

Rate Locks Exploded In March

Home shoppers following rates closely jumped on retreating rates in March, giving the spring buying season a boost. Black Knight’s March 2023 Originations Monitor showed that rate lock dollar volume exploded in March, up 43%, as rates retreated due to economic uncertainty. Lock volumes rose in all categories. Purchase locks were up 44% month-over-month, significantly higher than its average of 30% across the last five years. “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.  He explained that rates were inching up at the beginning of the month, but came down later in March due to banking sector turmoil. “The…

Purchase Locks Jumped In March As Rates Fell

Lock volumes increased across the board last month, with purchase locks seeing the greatest gains of any March in the past five years. Rate locks dollar volumes rose by 43% thanks to retreating rates and greater demand, according to Black Knight’s latest Originations Market Report. Rates fell by 24 bps by the end of the month, impacted by banking sector uncertainty. They are continuing to shrink moving into April, hitting 6.28% last week. “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,” said Andy Walden, vice president of enterprise research at Black Knight. Purchase locks were up 44% month-over-month…

Delinquencies Rose Again In February, But Prepayment Activity Is Up

Delinquencies across the nation rose in February to 3.45% as economic pressures squeeze Americans, but remain down from last year, Black Knight reported. Black Knight’s First Look at February 2023 data found that delinquent loans that are only a single payment behind overwhelmingly accounted for the increase. The 36,000 delinquency rise was driven by a 65,000 increase in first-time missed payments. Delinquencies of 60 and 90 days both fell, down by 12,000 (-4%) and 17,000 (-3%) respectively. Nearly all fifty states saw their serious delinquencies improve. On the other end, foreclosure starts also improved, breaking a streak of increases with a 9% dip. Starts remain almost 20% below pre-pandemic levels. Active foreclosure inventory increased slightly and is up 15% from…

Lock Dollar Volumes Up As Non-Conforming Loans Surge

Non-conforming loans pushed rate lock dollar volumes up in February as homebuyers struggle to handle high rates. While conforming, FHA, and VA loans all lost some share of the market last month, non-conforming loans increased across the spectrum, snagging 12.2% of the market, Black Knight reported in its latest Originations Market Monitor report. Jumbo loans saw a boost last month as high interest rates made GSE products less attractive. Dollar volume flew up as a result, though locks fell. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances was 6.49% last week, while the conforming rate was 6.79%. Conforming rates finished the month 52 basis points above January’s levels. Adjustable rate mortgages saw gains, accounting for…

Rate Locks Rose In January, But The Good News May Not Last

Rate lock volumes increased across the board in January, finally breaking a nine-month downward streak, as buyers began stepping out before the spring season. Lock volumes rose 32% last month, according to Black Knight’s Originations Market Report. “Mortgage rates declined in January, continuing a trend that began in early November 2022. Conforming rates dropped 36 basis points from where they were at the start of the year, and we saw that rates associated with those FHA/VA/jumbo locks all came down in kind,” said Kevin McMahon, president of Optimal Blue, a division of Black Knight. “Triggered by this pullback, rate lock volumes rose for the first time since March 2022, driven by declining interest rates and seasonal tailwinds, snapping a nine-month…

Permanent Rate Buydowns Continue To Reign For Affordability-Minded Buyers

Rate buydowns continue to soar as borrowers look for ways to combat the affordability crisis, according to new data from Black Knight. In the third week of January, 57% of buyers paid at least a half-point on a permanent buydown, while 44% paid a full point, and almost 25% bought down two or more points. In total, borrowers paid an average of 1.25 points down, at an average of $4,300 per borrower. Pre-pandemic buydowns from 2018 to 2020 averaged only 0.5 points, around $1,500. This is not the high point for buydowns, which peaked in September and October 2022 with 71% of buyers buying down their rates. But it points to a continuing trend of buyers trying to decrease their…

Rate Locks Set New Record Lows

Rate lock volumes took a beating in December as buyers and sellers remained on the sidelines. Black Knight’s December Originations Monitor Report found that typical seasonal patterns, together with continuing inflationary pressures and elevated rates, resulted in record lows for locks of all kinds. “Using Black Knight’s McDash mortgage performance data to provide comparative history, December saw the fewest purchase locks in a single month since early 2014, and the fewest overall rate locks on record dating back to January 2000 when Black Knight began reporting origination metrics,” said Kevin McMahon, president of Optimal Blue, a division of Black Knight. Rate lock dollar volumes fell by 19.4% in December, their lowest level in the five years Optimal Blue has tracked…

Purchase-Locks Fell 22% In November

Rate-lock volumes fell 21.5% in November despite 30-year rates dropping 48 bps over the course of the month, according to Optimal Blue’s Mortgage Market Indices from Black Knight. Rates are 3.3% higher YOY but have declined in recent weeks. But affordability struggle and continuing stock shortages have diminished buyer demand, pushing rate-locks down 39% in three months and 68% from the same time last year. Purchase locks fell 22%, while rate/term refis and cash-outs dropped 17% and 18%, respectively. Total refi locks accounted for only 15% of November’s activity. The Thanksgiving holiday and normal seasonal slowing also contributed to low lock volume, but Optimal Blue President Scott Happ noted that these cannot account for dwindling activity by themselves. “While we…

Homes Bought In 2022 Face Rising Underwater Risk As Prices Cool

Americans who bought a home this year are facing rising underwater risk as home prices cool. Black Knight’s October Mortgage Monitor found that 8% of homes bought in 2022 are now at least marginally underwater, while almost 40% have less than a 10% equity stake in their homes. “Make no mistake: negative equity rates continue to run far below historical averages, but a clear bifurcation of risk has emerged between mortgaged homes purchased relatively recently versus those bought early in or before the pandemic,” said Black Knight President Ben Graboske. “Risk among earlier purchases is essentially nonexistent given the large equity cushions these mortgage holders are sitting on. More recent homebuyers don’t fare as well.” This is a particular issue…