Mortgage volume dropped to 11-month low in April

With housing demand greatly outpacing supply and refinance loans decreasing despite low interest rates, mortgage volume sank to the lowest point since May 2020, according to Black Knight.

April’s Originations Market Monitor Report showed activity fell 11.3% from March, including drops of 6% for purchases, 13% for cash-out refinances and 20% for rate-and-term refinances. Notably, the month’s rate-and-term volume hit the lowest level since January 2020.

Annually, overall lending activity rose 23.5%, though it’s important to note that the lockdown conditions of April 2020 suppressed homebuying. Compared to the same time last year, April 2021 saw a 114% spike in purchases, with cash-outs jumping 27% and rate-and-term decreasing 34%. The 30-year fixed-rate’s gradual decline from 3.33% to 3.23% over the month failed to boost borrower interest.

NMN05172021-Black Knight.png

“Despite interest rates trending downward in April across all mortgage products, the decreases did not seem to be enough to bring borrowers — particularly refi borrowers — back to the table,” Scott Happ, president of secondary marketing technologies at Black Knight, said in a press release.

The refinance share of loan volume fell to 45% from 48% in March. About 14.5 million qualified borrowers would benefit from refinancing their current mortgage and upcoming interest rate movement and subsequent activity will be “interesting and telling,” Happ continued.

Of the 20 largest metro areas by origination volume in April, none experienced origination growth from March. Los Angeles led with a 5.2% share of the national total. But activity within the individual market fell 17.7% month-over-month. The New York statistical area accounted for 4.5% but also dropped 13.9% from March. Washington, D.C., came next at 4.3% but declined 12.2% monthly. Only five of the top 20 markets — Los Angeles, San Francisco, Denver, Riverside, Calif., and San Diego — had majority refinance shares.

For reprint and licensing requests for this article, click here.
Originations Refinance Purchase Housing inventory
MORE FROM NATIONAL MORTGAGE NEWS