Black Knight: Lock Volumes Fall Despite Lower Rates

Black Knight, Jacksonville, Fla., said rate lock volumes fell by 22 percent month over month in April despite marginally lower mortgage interest rates.

The company’s Optimal Blue Mortgage Market Indices attributed the sharp drop to March having three additional days; adjusted for calendar effects, lock rate volumes still fell by 10 percent month over month.

Month-over-month changes were similar across all loan purposes, with purchase locks down 21.8%, cash-out refinances declining 20.6% and rate/term refis down 27.6%. The refi share of lock volume dipped below 13% to 12.8%, setting a new floor for refi production.

The report said conforming loans took share from all other loan products in April, while FHA saw the biggest drop – a rare pullback since FHA began regaining share in late 2021 when it held 10% of total volume. Purchase lock counts were down 45% year over year; 38% below those in pre-pandemic April 2019. Average loan amount remained flat at $355,000, while the average purchase price rose slightly from $445,000 to $447,000. ARM share dropped to 7.8% of all lock volume, down from 8.8% in March.

“While half the decline can be explained by the fact that there were three fewer business days in April than in March, we clearly saw additional cooling in rate lock volumes this month,” said Andy Walden, vice president of enterprise research and strategy with Black Knight. “After seeing purchase rate locks pull to within 15% of pre-pandemic levels in mid-January and again in mid-March on easing rates, we’ve seen that deficit eclipse 30% again in recent weeks. The cause is likely multifaceted. In addition to fewer business days in April than in March, another component may be potential homebuyers waiting on the sidelines for more favorable rates before locking.”