Black Knight: Rate Lock Data Suggests 2020 Originations Could Surpass $4 Trillion

Black Knight, Jacksonville, Fla., said its monthly Mortgage Monitor report shows rate lock activity continues to remain strong across the board, which could lead to new quarterly and yearly records for origination volume.

The report said assuming a 45-day lock-to-close period, the third quarter will set new quarterly records for refinance, purchase and total origination volumes. Estimated origination volumes based on underlying locks suggest Q3 refinance and total originations could be up 25% or more from Q2, while purchase lending could be up by 35% or more. This would push 2020 purchase lending to its highest level since 2005 and both refinance lending and total origination volumes to their highest levels ever, with total lending on pace to easily eclipse the $4 trillion threshold for the first time on record.

“September lock activity held relatively level with August, but through October 19, lock activity overall is up 4% from the month prior – with purchase locks up 6% and refinance locks up 3% thus far,” said Ben Graboske, Black Knight President of Data and Analytics. “Interest rates setting new record lows in mid- and late October will likely continue to fuel lock activity in coming weeks.”

At the same time, Black Knight said low rates, improved affordability and low inventory continue to put upward pressure on home prices, with the median home price rising by 14.2% in September. This is up from an 11.5% increase in August, and the highest such annual home price growth rate in more than 15 years.

Despite pandemic-related headwinds earlier this year, the data suggest through November, purchase lending would already be up 11% from the same period in 2019 and poised to grow even further in December.