Rates were up over half a point in April and rate locks saw a 20.3% drop in response, according to Black Knight’s Originations Market Monitor report…(Black Knight)
- Rate/Term Refinances continued their decline with a 49.5% drop month-over-month and are now down 87.8% from the same time last year.
- Purchases were down 11.3% for the month and are only down 1.0% year-over-year.
- Cash-out Refinances were down 40.3% month-over-month and are down 36.7% year-over-year.
NOTE: Purchase locks now make up 80% of loans, an 8 percentage point increase from just last month and the lowest level on record since at least January 2018.
As loan volume falls, lenders are not sacrificing standards to find business as credit scores only fell in one category in April…
- Rate/Term: The average credit score actually increased 3 points to 732 in April which is down 3 points from one year ago.
- Purchase: The average credit score was unchanged month-over-month and was actually up 1 point year-over-year to 734.
- Cash-Outs: The average credit score fell 8 points from March and was down 27 points year-over-year to 705.
Scott Happ, president of Optimal Blue, noted that “Mortgage interest rates continued their steep ascent in April…To put that in perspective, in the last few weeks, we’ve blown through the recent peak seen in 2018 and are now hovering at or near the highest interest rates we’ve seen since the Great Recession.”
- 30-YEAR FIXED: Was up 63 basis points in one month to 5.42%, this is 225 basis points higher than one year ago.
Despite the horrible top-line number, this report shows that the housing market remains strong. Purchases are only down 1.0% despite a 226 bips move in rates, cash-outs are declining along with rates, and credit scores are holding steady. Despite crash bros continuing to predict a housing crash nothing that happened in 2008 is happening in 2022. Is it possible we actually learned from our past mistakes?