Facing challenges in mortgage rates, affordability, pricing and inventory, the housing market has never been more buying in decades, he said. Black KnightOrigination Market Monitor Report.
Nearly nine out of 10 home loans originated today are purchase loans, the report notes.
Purchase locks hit a record high last month, accounting for 88% of the market composition. Rate-locking activity increased by 14% in May, but most of the increase was attributed to the fact that the month had two more business days than April, Blackknight said.
Adjusting for this difference, daily trading volume increased by just 4% compared to April.
However, according to the report, purchase locks increased by about 15% and cash-out refinancing increased by 7%. Interest rate/term refinancing locks also rose last month, up 13% from April.
Overall, May improved from April, but mortgage lending remains subdued.
“Purchase loan interest rate locks rose from April, but fell to record lows compared to 2018 and 2019 averages as interest rates rose at the end of the month.” Andy Waldensaid Black Knight’s vice president of enterprise research.
Purchase loans accounted for the majority of origination activity for much of the last year, Walden said, suggesting both slowing home sales and the number of purchase mortgage originations are likely to decline going forward. said that
Additionally, the number of locks purchased was down 37% last month compared to 12 months ago and down 29% compared to 2019 levels.
The average purchase price in May rose for the sixth straight month to $454,000, while the average loan amount increased to $360,000.
More borrowers sought relief from higher fixed rates at the end of the month, data showed. The variable rate mortgage (ARM) share of locking activity increased to 8.41% in May compared to April.
Fit, FHA, and VA borrower credit scores also rose again in May. This marks a tightening of credit standards in an uncertain economic environment, with PurchaseRock’s credit score nearing a record high.
At the same time, the level of economic uncertainty in the market has led to historically wide spreads between 10-year Treasury yields and 30-year mortgage rates, with uncertainty spilling over into tighter credit standards across the board. There are, the report notes. .
“Uncertainty breeds fear of risk, which may be driving down payments and credit scores in recent originations. Credit lines are certainly tight, but home buyers face That’s not the only challenge,” Walden said.
