Mortgage refinancing falls off as rates break above 4%: Black Knight

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As the 30-year average mortgage rate climbs over 4%, mortgage refinancing activity is falling sharply, according to Black Knight’s Originations Market Monitor for February.

The Federal Reserve’s unwinding of its bond buying is affecting mortgage rates more than Treasury yields, said Scott Happ, president of Black Knight’s Optimal Blue division. “Driven by Fed policy and exacerbated by global instability, we’ve seen the spread between 30-year conforming rates and 10-year Treasury yields climb more than 40 basis points in just three months, topping 2.25% in February. Our OBMMI daily interest rate tracker showed the average 30-year conforming rate top 4% in February for the first time in more than two years, closing out the month at 4.09%. “

Overall rate lock activity slipped 5.4% from January, with rate / term refinancing dropping by 34.1% in February and cash-out financing declining by 15.3%. The drop in refi activity, down for the fifth straight month, pushed its share of the market down to 35%, its lowest point since May 2019.

Purchase lending rose 7.2% M / M on strong homebuyer demand. And the average home loan amount increased by $ 6.5K to just under $ 354K.

Source: Black Knight Originations Market Monitor

Nonconforming loans – including jumbos and loans with expanded guidelines – increased their market share to 17% of February’s lock activity.

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 68.6%.

Nonconforming loan products increased their market share by 79 basis points to 17% of the month’s lock activity.

Last week, Mortgage rates rose after two straight weeks of declines

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