March 2022 Originations Market Monitor

Driven by a Rise in Purchase Loans, Overall Rate Locks Up 19% in March Despite 70 Basis Point Rate Jump in the Month

Optimal Blue’s Mortgage Market Indices tracked conforming 30-year rates daily throughout March as they topped 4.9% before pulling back and finishing the month at 4.79%
The spread between mortgage rates and 10-year Treasuries climbed another 20 basis points as the rise in mortgage rates outpaced the ~50 basis point rise in Treasury yields
Overall rate lock activity rose 19% from January, driven by a 31% increase in purchase volume, which is now up nearly 70% over the past three months
Cash-out locks were mostly flat (+1.6%) while rate/term refinance volumes continued to contract, falling another 15.4% in March for an 81% year-over-year decline
The continued decline in rate/term refinance locks pushed the refi share of the market down to just 28%, the lowest point since November 2018
With the rate of home price growth continuing to set records non-conforming products captured additional market share in March and now account for 18% of lock activity
Likewise, upward pressure on home prices pushed the average loan amount up another $8,000 to just under $362,000

JACKSONVILLE, Fla. – April 11, 2022 – Today, Black Knight, Inc. (NYSE:BKI) announced the release of its latest Originations Market Monitor report, looking at mortgage origination data through March month-end. Leveraging daily rate lock data from Black Knight’s Optimal Blue PPE – mortgage lending’s most widely used pricing engine – the Originations Market Monitor provides the industry’s earliest and most comprehensive view of origination activity.

“Mortgage interest rates spiked in March, with 30-year offerings climbing 70 basis points over the course of the month,” said Scott Happ, president, Optimal Blue, a division of Black Knight. “In fact, our OBMMI daily interest rate tracker showed the average 30-year conforming rate reach as high as 4.93% late in the month before pulling back slightly to close out March at 4.79%. And yet, despite seeing the fastest one-month rise in rates in nearly 13 years, we saw purchase lock volumes increase by 31% from February – likely as prospective buyers moved to lock in their loans before rates climbed any higher.”

The month’s pipeline data showed overall rate locks up 19.1% from February, driven by a 31.5% surge in purchase lending activity. While cash-out refinance locks remained relatively flat (+1.6%), rate/term refinance activity continued to slide, with March marking the sixth consecutive monthly decline. The continued decline in rate/term refinance locks pushed the refi share of the market down to just 28%, the lowest point since November 2018. Non-conforming loan products continued to gain market share at the expense of agency volumes as the pace of home price growth has reached new record highs. Pull-through rates – the share of locks that result in funded loans – fell on both purchase and refinance locks, with refi pull-through falling to just 65.7%.

“As home prices continue to climb – even in the face of sharply rising interest rates – we’ve seen the average loan amount rise as well,” Happ continued. “The average loan rose by $8,000 to just under $362,000 in March, representing a more than 23% increase over February’s rise. In turn, non-conforming products – including both jumbos and loans with expanded guidelines – continued to take market share from conforming loans and accounted for a full 18% of the month’s lock activity. The FHA share of lock activity also rose on strong purchase lending demand.”

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.

About Black Knight
Black Knight, Inc. (NYSE:BKI) is an award-winning software, data and analytics company that drives innovation in the mortgage lending and servicing and real estate industries, as well as the capital and secondary markets. Businesses leverage our robust, integrated solutions across the entire homeownership life cycle to help retain existing customers, gain new customers, mitigate risk and operate more effectively.

Our clients rely on our proven, comprehensive, scalable products and our unwavering commitment to delivering superior client support to achieve their strategic goals and better serve their customers. For more information on Black Knight, please visit www.blackknightinc.com.