Rate Sensitive Borrowers Are Causing Rate Lock Volume To Jump 43%. Are Borrowers About To Go Into Panic Mode?
Rate lock volume jumped 43% in March. Some experts say this is due to market conditions.
Lock volumes increased across the board. This was led by purchase locks jumping 44% in March. This was above the 30% average February to March gain seen across the past 5 years.
Purchase locks showed significant improvement month over month. However, volume is down 40% compared to March 2022.
Cash-out refinance were up 31% in March from the previous month. Rate/terms grew by 36% from the same period last year.
Cash-out refinance were down 80% and rate/term refinances declined 71%.
In early March, originations faced pronounced downward pressure as mortgage rates climbed toward 7%.
The 30-year fixed mortgage rate climbed to the highest levels of the year in early March. The rate reached 6.8% before dropping to 6.4% by the end of the month.
The surge in purchase lending pushed the refi share of the market mix down to a low of just 13%. The ARM share of the month’s activity fell to less than 9% as borrowers took advantage of falling rates and shifted toward fixed-rate products.
The Federal Housing Administration (FHA) loan share increased to more than 20% of the pipeline in March. This is up from 18% at the start of the year and 12% from a year ago.
A cooling market lacking multiple bids and all-cash offers has made sellers more receptive to FHA offers.
The FHA also announced a 30 basis point reduction in the annual premium to mortgage brokers in February. As a result, Most borrowers are expected to see mortgage insurance premiums (MIPs) reduce to 55 bps from 85.
With the cut, housing costs will reduce by an average of $800 for roughly 850,000 homebuyers and homeowners in 2023, the White House said following the FHA’s announcement.
This Article Originally Appeared On Lender Meltdown
Also, Check Out More Stories About Banking And Lending On MFI-Miami
Write A Comment