Black Knight Inc BKI

• The Optimal Blue Mortgage Market Indices showed 30-year conforming rates rose 27 basis points in May to 6.72% after holding between 6.38% and 6.5% for the first half of the month
  
  
• Despite jumbo rates remaining elevated, nonconforming locks (including jumbo and expanded guidelines) gained share relative to all other products in May
  
  
• Overall rate lock volumes were up 14% month over month in May – a consequence of May having two more business days than April – while daily production was up a more modest 4%
  
  
• Purchase lock counts were down 38% year over year and down 29% compared to pre-pandemic levels in 2019, the greatest difference from 2018/2019 yet as rates rose again toward the end of the month
  
  
• While purchase lending remains constrained, it continues to drive the overwhelming majority of volume, accounting for 88% of May rate locks – a record high
  
  
• The average purchase price rose for the sixth consecutive month to hit $454K, while the average loan amount rose to $360K
  
  
• Credit scores of conforming, FHA and VA borrowers rose again in May – indicative of tightening credit standards in an uncertain economic environment – with purchase lock credit scores nearing record highs
  
  
• The adjustable-rate mortgage (ARM) share of May's lock activity climbed to 8.41% as more borrowers sought relief from rising fixed rates late in the month
  
  
• The 10-year Treasury yield rose 20 basis points in May to 3.64%, as the spread with mortgage rates continued to grow, briefly touching a six-year high on May 30 before ending the month at 3.08%

JACKSONVILLE, Fla., June 12, 2023 /PRNewswire/ -- Today, Black Knight, Inc. (NYSE:BKI) announced the release of its latest Originations Market Monitor report, looking at mortgage origination data through May 2023 month-end. Leveraging daily rate lock data from the Black Knight Optimal Blue PPE, the Originations Market Monitor provides the industry's earliest and most comprehensive view of origination activity.

"While May was an improvement over April, mortgage lending remains constrained, to say the least," said Andy Walden, vice president of enterprise research and strategy at Black Knight. "Indeed, while rate locks on purchase loans rose from April, they also dipped to their lowest level yet relative to 2018/2019 averages as rates rose late in the month. Mind you, purchase loans have been making up the lion's share of origination activity for much of the last year, making this a likely harbinger of both slowing home sales as well as purchase mortgage origination volumes on the horizon."

The month's pipeline data showed locks increased 14% overall on a month-to-month basis, with purchase locks up almost 15%, cash-out refinances rising 7% and rate/term refinance locks climbing 13%. The bulk of that increase can be attributed to May having two more business days than April. Adjusting for that, daily volume was up a more modest 4% month over month. Purchase locks accounted for 88% of locks in May, the highest share on record. Even so, purchase lock counts were down 37% year over year and 29% compared with pre-pandemic levels in 2019.

"Despite the many headwinds – and we all know them well by now: rates, affordability, prices and inventory – this remains the most purchase-dominant market we've seen in decades," Walden continued. "Nearly nine out of every 10 mortgages originated today is a purchase loan. At the same time, the level of economic uncertainty in the market has resulted in historically wide spreads between 10-year Treasury yields and 30-year mortgage rates, and that uncertainty seems to be trickling down to tightening credit standards across the board. Uncertainty breeds a fear of risk, and that is likely driving the rises we've seen in down payments and credit scores among recent originations. The credit box is certainly tightening, but it's far from the only challenge facing prospective homebuyers."

Each month's Originations Market Monitor provides high-level origination metrics for the U.S. and the top 20 metropolitan statistical areas by share of total origination volume. Much more detail on May's origination activity can be found in the full Black Knight Originations Market Monitor.

About Black Knight
Black Knight, Inc. (NYSE:BKI) is an award-winning software, data and analytics company that drives innovation in the mortgage lending and servicing and real estate industries, as well as the capital and secondary markets. Businesses leverage our robust, integrated solutions across the entire homeownership life cycle to help retain existing customers, gain new customers, mitigate risk and operate more effectively.

Our clients rely on our proven, comprehensive, scalable products and our unwavering commitment to delivering superior client support to achieve their strategic goals and better serving their customers. For more information on Black Knight, please visit www.blackknightinc.com/.

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SOURCE Black Knight, Inc.