Mortgage

Mortgage lending exercise hit a 13-month low in Might

Despite 14 million high-quality refinancing candidates, mortgage volume hit a 13-month low in May, according to Black Knight.

In the shadow of the grave housing shortage, the Emissions Market Monitor report showed that activity was down 4.8% from April, including a 3.4% decrease in purchases, 3.4% in cash-out refinances and 8.2% in interest rates – and term-related refinancing.

Annually, total lending decreased by 0.7% as interest rates and terms decreased 44.8%, while purchases and withdrawals from refis rose 43.4% and 32.2%, respectively. The 30-year fixed rate fell again, falling from 3.23% in April to an average of 3.15%.

"The decline in refinancing freezes seems to have more to do with borrower psychology," Scott Happ, president of secondary marketing technologies at Black Knight, said in a press release. "Sure, the rate hike in February dampened some of the excitement in the market, but refinancing activity just hasn't recovered as expected."

The refinancing share of loan volume fell from 45% in April to 44%, although refi incentives have increased by 15% in the past two months. The easing of refinancing rates declined 27% from March to May and "slowed at a time when an expected acceleration would otherwise be expected," continued Happ.

Of the 10 largest metropolitan areas by issuance volume in May, only Seattle recorded emissions growth of 1.4% in April. Los Angeles held the top spot with 5.2% of total national market share as its activity declined 5.8% month on month. The Washington D.C. statistical area accounted for 4.4% while it faded 1.7% from April. The New York subway came next at 4.3%, but individual origins were down 9.1% on a monthly basis. Los Angeles, Phoenix and San Francisco held majority refinancing shares.

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