Mortgage originations were down 34% in the first three months of 2017 driven by a 45% slump in refinancing loans, Black Knight Financial reports
Mortgage originations were down 34% in the first three months of 2017 driven by a 45% slump in refinancing loans, Black Knight Financial reports.
The mortgage tech firm’s April Mortgage Monitor reveals that the total volume of first-lien mortgages in the first quarter was $372 billion, down 9% from a year earlier and the lowest since the fourth quarter of 2014.
“As expected, the decline was most pronounced in the refinance market, which saw a 45% decline from Q4 2016 and were down 20% from last year, said Black Knight Data & Analytics Executive Vice President Ben Graboske.
He added that refinance loans also made up a smaller share of overall originations than in the past at 45% of total Q1. Higher credit score borrowers (740 and up) saw the greatest decline in refinance activity, seeing volume decline by 50%.
“Purchase lending was up year-over-year, but the three percent annual growth is a marked decline from Q4 2016’s 12 percent, and marks the slowest growth rate Black Knight has observed in more than three years – going back to Q4 2013,” said Graboske. “At that point in time, interest rates had risen abruptly – very similarly to what we saw at the end of 2016 – and originations slowed considerably.”
Black Knight calculates that home affordability is near a post-recession low despite softer interest rates with buyers needing to spend 22.6% of the national median income to afford monthly principal & interest mortgage payments for a median priced home. That is based on a 4.02% 30-year mortgage.
The mortgage tech firm’s April Mortgage Monitor reveals that the total volume of first-lien mortgages in the first quarter was $372 billion, down 9% from a year earlier and the lowest since the fourth quarter of 2014.
“As expected, the decline was most pronounced in the refinance market, which saw a 45% decline from Q4 2016 and were down 20% from last year, said Black Knight Data & Analytics Executive Vice President Ben Graboske.
He added that refinance loans also made up a smaller share of overall originations than in the past at 45% of total Q1. Higher credit score borrowers (740 and up) saw the greatest decline in refinance activity, seeing volume decline by 50%.
“Purchase lending was up year-over-year, but the three percent annual growth is a marked decline from Q4 2016’s 12 percent, and marks the slowest growth rate Black Knight has observed in more than three years – going back to Q4 2013,” said Graboske. “At that point in time, interest rates had risen abruptly – very similarly to what we saw at the end of 2016 – and originations slowed considerably.”
Black Knight calculates that home affordability is near a post-recession low despite softer interest rates with buyers needing to spend 22.6% of the national median income to afford monthly principal & interest mortgage payments for a median priced home. That is based on a 4.02% 30-year mortgage.
