Lockdown rate volume hasn’t been this low since December 2019

As mortgage interest rates rebounded in August after falling the previous month, the volume of rate locks fell to its lowest level in four years.

According Black Knightorigination market monitor report. Refi lock rate/duration dropped 94.5% year over year.

Withdrawal refi locks fell 8.9% from July and 72.2% from the same period in 2021. While market buying share remained the same from July to 82%, volume fell 14.3% from the previous month.

“Mortgage originators continue to feel the effects of interest rate and affordability issues,” said Scott Happ, president of optimal blue, a division of Black Knight. “Faced with higher rate headwinds and a shift to traditionally slower buying months, rate lock volumes fell nearly 9% in aggregate in August to their lowest level since December 2019” , did he declare.

The number of purchase locks, which excludes the impact of soaring home values ​​on volume, is down 30% from 2021 and 16% from 2019, marking the second month in a row that the number of purchase locks fell below pre-pandemic levels.

In front of Federal ReserveWith rates expected to rise later this month, 30-year fixed rate conforming mortgage rates trended higher, ending August at 5.8%according to Black Knight’s Optimal Blue OBMMI pricing engine.

The Fed is widely expected to raise interest rates for the fifth time after the Federal Free Market Committee (FOMC) September 20-21, based on comments from Chairman Jerome Powell.

“History strongly cautions against premature policy easing,” Powell told the Cato Institute Thursday, the last meeting public appearance before the Fed meeting. “I can assure you that my colleagues and I are strongly committed to this project and we will stay with it until the job is done.”

Rising interest rates continue to have “profound effects on housing affordability, which returned to near 35-year lows to end the month,” Happ said. While house prices saw the biggest one-month drop since January 2011 at 0.77% in July from the previous month, compared to the same period last year, house prices rose 14 .5%, according to Black Knight’s separate report.

The average purchase price of financed homes fell nearly $12,000 in August and is now down more than $43,000 since March. The average loan size fell $4,000 to $340,000 in August, marking the fifth straight decline as house prices fell month-over-month for the first time in three years.

Edward N. Arrington