Mortgage rate locks fell to pre-pandemic levels in November

Mortgage rate locks fell to pre-pandemic levels in November
Written by Publishing Team

Black Knight said that the volume of mortgage rate insurance fell in November for the third month in a row, to a level last seen in February 2020, before the pandemic unrest began.

Loan locks fell 4.7% in November compared to October, down 20.1% From November 2020, as rate and duration refinancing activity Hard hit by rising interest rates.

The drop in price-locking activity in November followed a 6% month-on-month drop in October and a 10% drop in September. The Black Knight market volume index for November was 240. In October the MVI was 252, September was 268 and August was 296. A year ago, the index was 299.

Consumers locked in a 9.4% lower rate of price and term references in November (49 MVI) versus October (54), while less price-sensitive products reported a smaller drop in activity: Buy Locks fell 3.9% (132 from 138) and cash reference It decreased by 2.5% (59 from 60).

Year-over-year, conversion rate and duration are down 65%. But, this was offset by a 12.6% increase in purchase price locks and a 35.7% increase in cash refinancing volume.

“While interest rates for the 30-year period that ended in November were relatively flat from where they were at the start of the month, there was some volatility in bids throughout the month,” said Scott Hub, head of secondary marketing technologies at Black Knight, in a press release. “Price moved up and down in a roughly 21 basis point range over the course of the month as the market digested the news of both the Fed’s tapering announcement and The new variant is omicron.

The only product that gained market share during the month was non-conforming loans, up 58 basis points from October to 14.4%. Matching mortgages accounted for 65.9% of closing prices, down a meager 3 basis points; The Federal Housing Administration dropped 21 basis points to 10.5% and Veterans Affairs 8.4%, down 34 basis points. And USDA loans got 0.8%.

On an annual basis, the changes are more dramatic. Non-conforming companies achieved a 564 basis point increase in market share compared to November 2020. For the FHA insured product, share is up 59 basis points. At the same time, the match share decreased by 302 basis points and the VA share decreased by 312 basis points.

While house price increases have subsided in recent months, they still have at record high levels. The average loan amount increased by $7,000 to $337,000 in November.

“As a result, we continue to see large, non-conforming loan products gaining market share at the expense of agency volumes,” Hub said. Matching higher loan limits announced by the Federal Housing Finance Agency and taking effect at the beginning of 2022, it will be interesting to see how far this trend will continue.


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