Rate lock volume was down 5.9% in October thanks to a big drop in rate/term refinancing. according to the latest data from Black Knight.
- Rate/term refinancing dropped 23.3% month-over-month and is now down 62.5% year-over-year.
- Cash-out refinances were down slightly month-over-month with a 0.3% drop. Meanwhile, purchases actually were in positive territory in October with 0.4% growth when compared to September’s data.
NOTE: The refinance share of the market has dropped to just 45% of all lock volume with purchases at 55%. That’s the lowest refinance level since June of this year.
The average credit score fell 1 point to 730 and conforming loans also dropped one point to 745.
- Government loans, FHA (662) and VA(709), also fell one point from October
NOTE: Mortgage rates continued their climb up 4 basis points to 3.2% in October.
Scott Happ, Black Knight Secondary Marketing Technologies President, said the refinance market is clearly changing…
“The dynamics of the refinance market are changing, with a sharp shift away from rate/term refis to cash-out lending…This shift tends to happen in any rising rate environment, never mind one in which American mortgage holders have more than $9 trillion in tappable equity available to them. While we did see cash-out locks tick down in October, the overall trend toward an equity-centric refi market remains strong and one we will continue to watch closely in the coming months.”