Foreclosure volume drops sharply on rate hike as August production hits four-year low

  • dark knights Blue Mortgage Market Optimal Indices followed by 30-year rates as they started the month at a recent low and rose 50 basis points to end the month at 5.8%
  • Total foreclosure volumes were down nearly 9% from July, with declines in both rate/duration (-13.9%) and refinances (-8.9%); purchase credits, which represented 82% of total activity, were down 8.7%
  • The number of purchase locks, which excludes the impact of surging home values ​​on dollar volume, is down 30% from last year and 16.1% from 2019, reaching its lowest level in August for more than four years
  • July marks the second month in a row that the number of purchase locks has fallen below pre-pandemic levels amid affordability headwinds
  • The average purchase price of financed homes has fallen by almost $12,000 (-2.7%) in August and is now down over more than $43,000 (-9.2%) since March
  • The average loan size has fallen further $4,000 in august at $340,000the fifth consecutive drop, as house prices fell month-over-month for the first time in three years

JACKSONVILLE, Florida., September 12, 2022 /PRNewswire/ — Today, Dark Knight, Inc. ( New York stock market :BKI) has announced the release of its latest Origination Market Monitor report, examining mortgage data through the end of August. Leverage daily data on lockout rates of the Black Knight Optimal Blue PPE – the most widely used pricing engine for mortgages – Originations Market Monitor provides the industry’s oldest and most comprehensive view of origination activity.

“Mortgage originators continue to feel the effects of interest rate and affordability issues,” said Scott Happ, president of Optimal Blue, a division of Black Knight. “Faced with higher rate headwinds and a shift to traditionally slower buying months, rate lock-in volumes fell nearly 9% in aggregate in August to their lowest level since December 2019. The number of purchase locks, which excludes the impact of soaring home values ​​on volume, is down 30% from a year ago. That number is now down more than 16% from 2019, marking the second month in a row that the number of purchase locks has fallen below pre-pandemic levels, as well as the lowest August number. low in more than four years. »

Pipeline data for the month showed overall dollar locked rate volume decreased 8.9% month-over-month, driven by a 13.9% drop in rate locks/rollover duration , which are now down 94.5% from last year. In-cash refinancing activity fell a further 8.9% from July, down 72.2% year-over-year. The refi share of the market held steady at 18%, the lowest share on record dating back to January 2018. Government loan products continued to gain market share as FHA foreclosure activity increased at the expense of conventional and non-conforming loan volumes, a trend also likely reflected in a further decline in average loan size – of $344,000 at $340,000. The overall average credit rating in August remained stable at 722.

“Interest rates rose again in August after falling slightly in July,” Happ explained. “This continues to have profound effects on home affordability, which fell to its lowest level in nearly 35 years to close the month. As we reported last month, house prices have started to retreat in some of the hottest domestic markets, particularly those on the West Coast. Similarly, we have seen declines in both the average purchase price and the average amount financed in each of the last 5 months, each down 9% since March. We’ll be keeping a close eye on this trend as the market enters the traditionally slower buying months ahead.”

Each month’s Originations Market Monitor provides high-level origination metrics for the United States and the top 20 metropolitan statistical areas by share of total origination volume. Much more detail on the August origination activity can be found in full Black Knight Originations Market Watch Report.

About the Dark Knight

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

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

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SOURCEBlack Knight, Inc.

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