Rate lock activity continues to plummet in 2022 with total volume falling 8.9% in August and is now down 57.1% year-over-year, according to Black Knight’s August Origination Market Monitor.
- Refis saw the biggest monthly drop with a 13.9% decline for rate/term and an 8.9% drop for cash-outs. Rate/term and cash-outs are now down year-over-year 94.5% and 72.2%, respectively.
- Purchases were down 8.7% in August and are now down 28.2% year-over-year. Purchases now make up 82% of rate lock activity.
Below Average. Purchase lock counts, which exclude the impact of soaring home values on dollar volume, are now down 30% from last year and are also down 16.1% from 2019. This is the lowest August level in more than four years and is now the second consecutive month the number of purchase locks has fallen below pre-pandemic levels.
Credit Scores Stay High. Despite volume plummeting, mortgage companies are not dropping their standards. Rate/term refis saw a slight one-point drop to an average of 733 in August followed by Purchases that were unchanged at 730.
- Cash-outs, which had been falling since the end of 2021, saw a two-point increase to an average of 695 in August.
Falling Prices. The average purchase price among homes being financed fell by almost $12K (-2.7%) in August and is now down by more than $43K (-9.2%) since March.
- FYI: The average loan amount dropped for the fifth time in a row with a $4,000 decline in August to $340K.
Bottom Line: Everything was down in August except for credit scores.