Rate locks were up in July thanks to low-interest rates, according to the Black Knight’s July 2021 Originations Market Monitor report… (Black Knight)
- Rate locks were up 5.5% from June thanks to a big jump in refis that has now brought the refinance/purchase split back to 50-50 for the first time in five months.
- Refinances for rate/term locks were up 24% and cash-out refinance locks were up 20%.
NOTE: Purchase volumes actually declined 7% thanks to continued historically low inventory levels.
Scott Happ, Black Knight Secondary Marketing Technologies President, said that rates dropping below 3% on certain loan products was the catalyst for this surge…
- “The mid-month surge was pronounced, but short-lived, suggesting that crossing the 3% threshold was what borrowers were waiting for before acting, and when rates ticked back above that psychological line, they held back on the sidelines once again.”
IMPORTANT NOTE: With everyone concerned about another housing bubble and 2008 happening again. The refi boom in July actually saw the average credit scores up for the month. Proving that increased activity is not a result of lowering lending standards.
At the end of last week, Taylor Borden at Business Insider argued that housing shortages could last until 2031. Not a single economist on planet earth believes that interest rates are going to fall over these next few years. As more people refinance their homes at rates under 3% there will be fewer people in the near future open to selling their homes knowing their rate could jump significantly higher if they do.