Rate lock volume ended 2022 with the ninth consecutive month-over-month drop, according to the Black Knight Originations Market Monitor report.
- M-O-M: Rate lock volume fell for the ninth straight month with a 19.4% drop from November.
- Y-O-Y: Rate lock volume is now down 68.3% when compared to the same time last year.
Purchases On Top. Purchases were 84% of the origination market as 2022 came to a close despite a 20.5% drop from November. Purchases ended the year down 48.9%.
- Cash-out refis fell 14.1% for the month to an index of 7 which is now down 87.0% year-over-year. Rate-term refis fell 11.2% from November to an index of 3, putting the index down 92.8% year-over-year.
Standards Stay High. Despite volume plummeting, loan standards are dropping. The average credit score for purchases held at 728 in December which is only down two points from one year ago.
- Rate/term refis stayed on top even with a four-point drop to an average of 732 in December while cash-outs improved four points to an average of 691.
Loan Size Increases. A slight dip in mortgage rates helped push the average loan amount up in December for the first time in three months to $336,000 (+$5k).
- The average 30-year fixed ended the year at 6.52%, this is 6 basis points lower than in November but is still 317 basis points higher than one year ago.
BOTTOM LINE: It was not a good year for rate lock volume. However, the good news is the only direction we can go s up.