Mortgage origination activity increased last month despite rapidly rising mortgage rates as potential buyers sought to lock in their loans.
According to the Mortgage Monitor monthly report from Black Knight. While in-cash refinance activity, which has been somewhat isolated due to strengthening home values, rose only 1.6% in March from February, term refinance issuances fell 15.4% over the same period.
Despite the fastest one-month 30-year mortgage rate increase in nearly 13 years, an increase in purchase foreclosure volume was “likely as potential buyers decided to foreclose on their loans before rates climbed further “Scott Happ, president of Black Knight’s Optimal Blue division, said in a statement.
The 30-year mortgage rate rose 70 basis points to end March at 4.79%, marking the highest level in more than three years, according to the Daily Interest Rate Monitor. Optimal Blue Mortgage Market Indices. Amid rapidly rising mortgage rates, refinancing accounted for 28% of the mortgage market last month, the lowest level since November 2018.
As home prices surged in the seller’s market, the average loan rose more than 23% to just under $361,000 in March from February. Home prices across the country rose 20% year-over-year in February, marking 12 straight months of double-digit gains, according to CoreLogic.
“In turn, non-compliant products, including jumbos and loans with expanded guidelines, continued to take market share from compliant loans and accounted for 18% of the month’s foreclosure activity,” said Happ.
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Compliant loans accounted for about 61% of foreclosure activity last month, down 686 basis points from a year ago.
The highest lockdown volume came from the Los Angeles-Long Beach-Anaheim, Calif., area, where 38% of nationwide refis were made last month. The New York, Newark, Jersey City area had the second highest lock volume rate at 4.3% and Washington, Arlington, Alexandria trailed at 3.9%.