And there’s still potential for growth, say Black Knight
Low-interest rates continued to spur mortgage lending activity in August, according to the latest Black Knight Originations Market Monitor Report.
“After starting the month below 3%, interest rates spent much of August hovering just above that point, with the conforming 30-year at 3.05% at month’s end, according to our OBMMI daily interest rate tracker,” said Scott Happ, president of Black Knight Secondary Marketing Technologies. “That sub-3% period seems to have been enough to spur some high-credit-score and high-balance borrowers to refinance, as average credit scores rose along with the non-conforming share of the market.”
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Data from Black Knight’s report showed that overall rate locks edged up 1.3% from July, driven by a 7.6% jump in cash-out activity. The increase was enough to push the overall refi share of the market back to 50% for the first time since February. Locks on purchase loans and rate/term refis remained flat in August, down 0.5% and 0.8%, respectively.
“The rise in cash-out lending is hardly surprising given the extraordinary growth we’ve seen in tappable equity this year,” Happ said. “We’ve now seen cash-out activity increase for three consecutive months, and with $173,000 in equity available to the average homeowner with a mortgage and home prices still climbing, there is still room in the market for growth.”
With equity levels at record highs and interest rates projected to climb in coming years, Happ expects cash-out lending to play a much larger part in the overall refinance market.