Mortgage Interest Rate Sensitivity Triggers 25% Spike in May Rate-and-Term Refinance Activity

Optimal Blue issues May 2024 Market Advantage mortgage data report
Optimal Blue Market Advantage

PLANO, Texas – June 13, 2024 – Optimal Blue today released its May 2024 Market Advantage mortgage data report, which revealed a 25.6% month-over-month (MoM) spike in rate-and-term mortgage refinances. The spike was a response to a modest drop in the Optimal Blue Mortgage Market Indices (OBMMI) 30-year conforming rate, which ended the month at 7.02%.

“The sharp increase in demand for rate-and-term refinances following a dip in rates indicates that homeowners with rates above 7% feel pinched and are sensitive to even modest interest rate movements in the current economic landscape,” said Brennan O’Connell, director of data solutions at Optimal Blue. “For context, since Optimal Blue began tracking the 30-year conforming rate as a market index in January 2017, interest rates only exceeded 7.02% on 120 market days. Based on other measures, buyers who locked loans on those days have the highest mortgage rates of the past two decades.”

Key findings from the May 2024 Market Advantage report, which are drawn from direct-source mortgage lock data, include:

  • Shallow dip in interest rates: The benchmark OBMMI 30-year conforming rate bottomed out on May 15 at 6.875% before ending the month at 7.02%, 22 bps lower than at the close of April. This reprieve in mortgage rates prompted a 25.6% MoM increase in rate-and-term refinance volume.
  • Overall volume increase: Total volume rose by 5.3% MoM and 1.8% year-over-year (YoY), driven by a 4.1% increase in MoM purchase lock volume, a 7.2% rise in cash-out refinances, and a substantial 25.6% increase in rate-and-term refinances.
  • YoY decline in purchase lock counts: Purchase lock counts, a key market health indicator that controls for home price appreciation and refinance volatility, were down 4% YoY. Despite the decline, May YoY purchase lock counts were stronger than the 7% YoY decline recorded in February, the last month unimpacted by the timing of the Easter holiday.
  • Coastal market growth: Major coastal cities saw the highest MoM volume increases, with East Coast cities New York, Boston, and Jacksonville and West Coast cities Riverside-San Bernardino, San Diego, Sacramento, and Portland each seeing volume gains of 13% or greater.
  • Stable, high credit quality: Average credit scores remained high, with the purchase borrower score averaging 738.
  • Stable loan amounts, rising home prices: MoM, the average loan amount remained flat at $374.5K. MoM, the average home purchase price rose for the fifth consecutive month this year, up $2.4K from $477.9K to $480.3K.

The full May 2024 Market Advantage report provides further detail on these findings and more insights into U.S. mortgage market trends.

About the Market Advantage Report:

Formerly known as the Originations Market Monitor, Optimal Blue issues the Market Advantage mortgage data report each month to provide early insight into U.S. mortgage trends. Leveraging lender rate lock data from the Optimal Blue PPE – the mortgage industry’s most widely used product, pricing, and eligibility engine – the Market Advantage provides a view of early-stage origination activity. Unlike self-reported survey data, mortgage lock data is direct-source data that accurately reflects the in-process loans in lenders’ pipelines.

Nothing herein shall be construed as, nor is Optimal Blue providing, any legal, trading, hedging, or financial advice.

About Optimal Blue

Optimal Blue effectively bridges the primary and secondary mortgage markets to deliver the industry’s only end-to-end capital markets platform. The company helps lenders of all sizes and scopes operate profitably and efficiently so they can fulfill the momentous role of helping American borrowers achieve the dream of homeownership, regardless of market dynamics. Through innovative technology, a network of interconnectivity, rich data insights, and expertise gathered over more than 20 years, Optimal Blue is an experienced partner that allows lenders to optimize their advantage from pricing accuracy to margin protection, and every step in between. To learn more, visit OptimalBlue.com.

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Media contact:
Olivia DeLancey
904.854.5459
Olivia.DeLancey@OptimalBlue.com

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Mortgage Technology Veteran Brings Passion for Customers and Innovation to the Leader in Comprehensive Capital Markets Technology

PLANO, Texas – June 10, 2024 – Optimal Blue today announced the appointment of Joe Tyrrell as CEO. Tyrrell succeeds interim CEO Scott Smith of Optimal Blue’s parent company, Constellation Software Inc.

Tyrrell brings over 25 years of experience in the mortgage, finance, and technology industries to Optimal Blue. This includes serving as president of ICE Mortgage Technology, as well as in various leadership roles at Ellie Mae, including chief operating officer, prior to its acquisition in 2020. Most recently, Tyrrell served as the CEO of Medallia, a customer and employee experience company.

“I have always been attracted to companies that make their clients’ success their top priority, and that is especially true with Optimal Blue, the clear market leader in secondary marketing technology,” said Tyrrell. “For the past year and a half, I have been delivering innovation and real generative AI capabilities to the largest and most trusted consumer, health care, hospitality, financial services, and technology brands in the world, and I am excited to now bring those capabilities to Optimal Blue’s lenders and partners in an industry that I love.”

Smith will continue his role within Constellation Software, where he serves as president of Andromeda, the portfolio in which Optimal Blue operates. In addition to overseeing the CEO transition, Smith will continue supporting the success of the Optimal Blue business through his position.

“It was a priority to identify the right leader to support our investment in Optimal Blue and the long-term success of the business,” said Smith. “We’ve found that and more with Joe Tyrrell, who is passionate about client relationships and innovation – two tenets that have been core to Optimal Blue’s culture throughout its decades as a market leader. Joe’s extensive experience in this industry affords him a fundamental understanding of the needs and challenges lenders face and ways innovative technology and real-time data can solve them. Along with the other leaders within the Andromeda portfolio of Constellation Software, I look forward to continuing to support the success of Optimal Blue under Joe’s leadership.”

About Optimal Blue

Optimal Blue effectively bridges the primary and secondary mortgage markets to deliver the industry’s only end-to-end capital markets platform. The company helps lenders of all sizes and scopes operate profitably and efficiently so they can fulfill the momentous role of helping American borrowers achieve the dream of homeownership, regardless of market dynamics. Through innovative technology, a network of interconnectivity, rich data insights, and expertise gathered over more than 20 years, Optimal Blue is an experienced partner that allows lenders to optimize their advantage from pricing accuracy to margin protection, and every step in between. To learn more, visit OptimalBlue.com.

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Media Contact
Olivia DeLancey, Optimal Blue
904.854.5459
Olivia.DeLancey@OptimalBlue.com

PLANO, Texas – June 3, 2024 – Optimal Blue today announced that Sara Holtz, chief marketing officer, has been honored with the 2024 HousingWire Marketing Leader award. The Marketing Leaders are selected by HousingWire’s selection committee based on their professional achievements within their organizations, contributions to the overall housing economy, client impact, and personal success over the course of their careers. This year, 50 winners were selected. This is the second year in a row Holtz has made the list.

“Sara joined us in March 2024 and has already made a significant and positive impact on our brand internally and externally. She came in at full speed, rolling out Optimal Blue’s ‘Optimize Your Advantage’ campaign at the MBA’s Secondary and Capital Markets Conference last month. We are incredibly proud of her work and look forward to seeing what she leads her team to accomplish next,” said Scott Smith, interim CEO of Optimal Blue and president of Andromeda, Constellation Software Inc. “Sara inspires her team every day with passions and insights drawn from her lengthy and impactful experience in our industry.”

Holtz was tapped as CMO of Optimal Blue to lead the industry’s most used capital markets platform through the next stage in its evolution. With 20 years of mortgage marketing expertise under her belt, Holtz’s firm grasp of the mortgage life cycle and competitive landscape has enabled her to gain buy-in on a refreshed brand narrative, value proposition, and marketing strategy all within her first month at the organization. In addition to an industry-focused strengthening of relationships for Optimal Blue, Holtz is providing strategic direction and oversight. She’s refreshed KPIs for marketing initiatives and is spearheading a complete overhaul of marketing systems.

“The 2024 Marketing Leaders are once again setting the bar high, pushing boundaries, and redefining excellence in mortgage and real estate,” said HousingWire Editor-in-Chief Sarah Wheeler. “Their innovative strategies, creative campaigns, and data-driven approaches are not only driving remarkable business growth but also inspiring a new standard of excellence. We are immensely proud to honor these visionary leaders who exemplify the transformative power of marketing.”

About Optimal Blue

Optimal Blue effectively bridges the primary and secondary mortgage markets to deliver the industry’s only end-to-end capital markets platform. The company helps lenders of all sizes and scopes operate profitably and efficiently so they can fulfill the momentous role of helping American borrowers achieve the dream of homeownership, regardless of market dynamics. Through innovative technology, a network of interconnectivity, rich data insights, and expertise gathered over more than 20 years, Optimal Blue is an experienced partner that allows lenders to optimize their advantage from pricing accuracy to margin protection, and every step in between. To learn more, visit OptimalBlue.com.

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Media Contact
Olivia DeLancey, Optimal Blue
904.854.5459
Olivia.DeLancey@OptimalBlue.com

New Campaign Demonstrates the Distinct Value the Independently Operated Company Delivers to Market Participants That Helps Them Operate Profitably Regardless of Market Conditions

PLANO, Texas – May 16, 2024 – Optimal Blue announced the launch of its Optimize Your Advantage campaign in advance of the MBA Secondary and Capital Markets Conference. This comprehensive brand initiative highlights the value and innovation the company delivers to clients. Through Optimal Blue’s position as the housing industry’s only end-to-end capital markets platform, lenders and other market participants have greater control of their profit margins, giving them distinct advantages, regardless of market conditions. In turn, they are better positioned to make housing finance accessible to more American borrowers.

“‘Optimize Your Advantage’ illustrates how Optimal Blue helps lenders effectively manage and significantly improve their return on investment,” said Sara Holtz, chief marketing officer of Optimal Blue. “There are benefits to working with a nimble partner like Optimal Blue that can anticipate and quickly deliver the innovations clients need to operate efficiently and profitably. In turn, these lenders can help more borrowers fulfill the dream of homeownership – a momentous purpose that requires a proven partner with the technology, network, data, and expertise necessary to succeed in dynamic markets. We’re incredibly proud of the fact that Optimal Blue is the only provider that delivers on these needs from pricing accuracy to pipeline risk management, and every step in between.”

The campaign showcases the interconnectedness of Optimal Blue’s ever-growing network. Through an API-first approach, the company bridges critical connections between the primary and secondary mortgage markets to the benefit of the larger industry. This network brings together hundreds of thousands of individual lenders, investors, brokers, and vendors to yield constant value by way of knowledge-sharing and real-time, competitive benchmarking.

Further, Optimal Blue’s technology and data offerings form a critical, complete, and scalable capital markets infrastructure – from the time an American borrower looks into homes they can afford in terms of accurate product and pricing options, to when a lender considers originating a mortgage, through rate locking, counterparty oversight, pipeline hedging, securitization and trading, and on through the valuation of mortgage servicing rights and portfolio monitoring for additional lead generation opportunities.

The company was acquired by Constellation Software in September 2023, and this new campaign marks Optimal Blue’s continued commitment to the future of mortgage lending and secondary marketing. Through Constellation’s independent ownership model, Optimal Blue operates as a distinct entity with access to resources and best practice sharing from its parent company.

“Optimal Blue has been setting the pace of innovation and product delivery in the capital markets space for decades, and a key to that long-term success is our company’s ability to continuously innovate and evolve for the market’s needs,” said Scott Smith, interim CEO of Optimal Blue and president of Andromeda, Constellation Software. “Our clients are the driving motivation behind everything we do, and we’re pleased to shine a light on the unique value Optimal Blue brings to their success.”

The campaign will include efforts to further enhance Optimal Blue’s existing client advocacy program, through which the company solicits client feedback that is used to directly inform innovation. Enhancements to the advocacy program will include additional value-add forums for clients, as well as new brand initiatives to showcase Optimal Blue’s value in action through client spotlights.

 

About Optimal Blue

Optimal Blue effectively bridges the primary and secondary mortgage markets to deliver the industry’s only end-to-end capital markets platform. The company helps lenders of all sizes and scopes operate profitably and efficiently so they can fulfill the momentous role of helping American borrowers achieve the dream of homeownership, regardless of market dynamics. Through innovative technology, a network of interconnectivity, rich data insights, and expertise gathered over more than 20 years, Optimal Blue is an experienced partner that allows lenders to optimize their advantage from pricing accuracy to margin protection, and every step in between. To learn more, http://www.OptimalBlue.com.

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Media Contact
Olivia DeLancey, Optimal Blue
904.854.5459
Olivia.DeLancey@OptimalBlue.com