Black Knight, Inc.'s latest Originations Market Monitor report showed April's month-end average conforming 30-year rate at 3.17%, down 17 basis points (BPS) from March but still up 34 BPS since the end of January.
"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," said Black Knight secondary marketing technologies president Scott Happ, according to the report. "April saw the lowest overall rate lock volume since May 2020, with rate/term refinance lending the lowest since January 2020 – before the 10-year Treasury yield fell below 1% for the first time ever, setting off a yearlong run of interest rates hitting 14 separate record lows in 2020."
Black Knight's report shows that overall rate locks were down across the board, falling 11.3% from March. While purchase locks saw a 6% month-over-month decline, sharper monthly drops were observed among both cash-out (-13%) and rate/term (-20%) refinances. The refinance share of the market mix dropped again in April, accounting for just 45% of the month's origination activity. On an annual basis, only rate/term refinance lending is down from last April (-34%), whereas both cash-outs (+27%) and purchase loans (+114%) are up year-over-year.
"As volume has tightened, we've seen average credit scores decline across all products and purposes, and conventional loans lose share to government-backed mortgages," Happ continued. "Neither are unexpected developments given that, when rates begin to rise, higher-credit borrowers tend to simply not engage. Right now, though, rates are still hovering in a historically comfortable place, with approximately 14.5M homeowners who could still likely qualify for and benefit from a refinance. It will be interesting – and telling – to see both how rates move in the coming weeks, and whether or not we see refi volumes increase as a result."
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