Despite rates climbing at the fastest rate in 13 years, rate lock volume saw a 19.1% jump thanks to a big jump in purchases in March, according to March’s Black Knight Mortgage Monitor report…(Black Knight)
- Purchase locks were up 31.5% in March which helped propel overall lock volume up 70% for the first three months of 2022.
- Rate/term refinance locks were down 15.4% for the month and are now down 81% year-over-year
- Cash-out locks were up relatively flat with just a 1.6% jump from February.
NOTE: Purchase locks now make up 72% of total volume the highest level since November 2018.
Rising rates are, oddly enough, helping to spur purchase activity. Scott Happ, president of Optimal Blue, said in a statement, “…despite seeing the fastest one-month rise in rates in nearly 13 years, we saw purchase lock volumes increase by 31% from February – likely as prospective buyers moved to lock in their loans before rates climbed any higher.”
- 30-YR FIXED was up 69 basis points to end the month at 4.79% which is 145 basis points higher than the same time last year.
- 30-YR FIXED VA saw the biggest move with a one-month delta of 80 bips and a year-over-year climb of 161 basis points.
The good news is credit scores are holding strong as we reach the end of this hot housing cycle…
- PURCHASE locks saw credit score unchanged monthly and year-over-year at 734
- RATE/TERM locks saw a one-point drop to 729 which is down 9 points from the same time one year ago.
- CASH-OUT locks saw the biggest decline with a 5 point drop to 713 which is down 24 points from the same time one year ago.
The narrative for the last month or so has been a massive decline in mortgage demand. While this is true, it is a bit misleading. Wannabe home buyers who are on the fence are undoubtedly going to pull back when rates rise and buying becomes less affordable. However, the rate lock volume highlights the other reaction which is urgency. Those who can afford it have clearly decided it is now or never when it comes to purchasing a home. Unfortunately, this will lead to a big drop in the next few months as those who would have been buying are buying now and those on the fence will be turned off by higher rates and costs.