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Optimal Blue: Spring Homebuying Season Kicks Off With Increase in Origination Activity
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Optimal Blue, Plano, Texas, released its February 2024 Originations Market Monitor report, finding an increase in monthly purchase mortgage locks. That propelled a net increase in origination activity despite the interest rate environment.
Month-over-month rate lock volumes were up 5% due to an 8.3% jump in purchase activity.
The average loan amount increased from $355,600 to $359,300, with the average purchase price rising from $444,900 to $454,100.
However, activity fell by 22.5% for rate/term refinances and 3.1% for cash-out refinances.
“As the spring buying season commenced, we saw a resurgence in purchase locks, despite the rise in interest rates,” said Brennan O’Connell, Director of Data Solutions at Optimal Blue. “Although lock counts were down on a year-over-year basis, the rate of decline is decelerating and suggests we may be nearing a floor for purchase lending in the current rate environment.”
Nonconforming products–including jumbo and non-QM loans–saw gains, with an additional 183 basis points of market share to end the month at 11%
Conforming loans remained flat at about 57%, and FHA and VA loans fell slightly.
Adjustable-rate mortgages increased slightly, but they remain at only about 6% of total production volume.
Credit quality improved nearly across the board, with the exception of VA loans, where it held steady.