As expected, refinances let the growth, experiencing a 200% increase year-over-year.
Black Knight recently released its findings from its Mortgage Monitor report. The report covered a smattering of housing industry news, including Q2’s record-breaking origination numbers, what rate lock data suggests is in store for Q3, and how servicer retention rates are holding up amid the surge of refi activity. Beginning with the analysis of Q2 2020, this period experienced the greatest quarterly origination volume to date (reporting nearly $1.1 trillion in first lien mortgages originated). Experts attribute this impressive number to be a direct result of the historically low interest rates in the market today, which are acting as catalysts for a proverbial hail storm of refinancing. In regard to refinancing, refinance lending rose over 60% from the prior quarter (Q1 2020), bringing it to 200% higher than this same time last year (in dollar value, this makes up almost 70% of all first lien originations). Specifically, a staggering statistic of 2.3 million refis were reported as originating in Q2 2020. This impressive amount was the highest amount experienced in almost 17 years. Purchase loans originating this quarter amounted to $351 billion, driven by low rates and improved affordability. Based on rate lock data, expert analysts believe that the spring homebuying season was pushed back to summer. With purchase locks during Q2 falling 10% below their what was expected, they have since risen (up 36%), flying in the face of the normal housing market trends. As of now, purchase locks scheduled to close in Q3 are 23% above seasonal expectations, and the two quarters combined are now more than 6% above expected seasonal volumes. What’s more, the rate lock data appears to predict even greater surge in refinance lending. Specifically, locks on refis expected to close in the third quarter are already up 20% from Q2.
Source: DSNews