Black Knight reports that rate locks, as measured by
the company’s Market Volume Index, declined 4.7 percent from October to
November. Those for refinancing dropped by 9.7 percent even as interest rates remained
fairly stable
while purchase locks were down 3.9 percent. The total index, at
240, is 20.1 percent lower than in November 2020. The year-over-year changes are lop-sided. Purchase locks
in November decreased 12.6 percent while refinancing fell 65 percent compared
to November 2020, a point at which interest rates on the various loan products
were 31 to 58 basis points (bps) lower. Forty-five percent of originations in
November 2021 were for refinancing as both rate and term and cash-out volume fell. 
The company’s Originations Mortgage Monitor
notes, “With interest rates climbing and more than $9 trillion in tappable
equity, the dynamics of the refinance market are shifting toward cash-out
lending. This shift tends to happen in any rising rate environment, but it is
especially significant now, at a time when average mortgage debt, at just over 45
percent, is at its lowest level in more than 20 years.”

 

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