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Mortgage Rate Locks Are Down a Whopping 57 Percent From a Year Ago

Housing crash? You bet. Let's discuss the details.
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Black Knight Mortgage Monitor 2022-08

Black Knight Mortgage Monitor

Please consider the Black Knight Mortgage Monitor August 2022 Review.

Key Details 

  • Volumes continued to fall across the board as the originations market adjusted to renewed interest rate pressures and continuing affordability challenges.
  • Overall, locks were down 57.1% year over year. 
  • Purchase locks, which now account for 82% of volume, were down 8.7% in August (28.2% year over year).
  • Purchase locks were down 30.2% over the last three months. 
  • Rate/term locks decreased 13.9% in August, cashouts, which had been somewhat insulated early in the rate cycle, fell 8.9%. 

Mortgage Origination by Loan Product

Black Knight Mortgage Monitor by Loan Product 2022-08

US taxpayers are increasingly on the hook housing loans.

Refinance and Purchase Locks Increasingly Fail 

Black Knight Mortgage Monitor Pull-Through  2022-08

Life-Style Maintenance Desperation Sets In 

Overall, 18 percent of operations are refis. I have some question in to Black Knight but I fail to see how any of these refi operations can be at a lower rate. 

The numbers vary by city. 

Refis account for 23% of the volume in Los Angeles CA, 22% in Phoenix AZ, 24% in Atlanta GA, 25% in Riverside CA, and 21% in Tampa FL.

Anyone doing refis at rates close to 6% from rates of under 3% in 2020 has serious issues somewhere!

Existing-Home Sales Fall 5.9 Percent, Down Sixth Consecutive Month

None of the above data should be surprising.

On August 18, I noted Existing-Home Sales Fall 5.9 Percent, Down Sixth Consecutive Month

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The housing slump accelerates with another 5.9 percent decline in July, down 20.2 percent from a year ago, and 25.9% since January.

Spotlight on Fed Silliness

The Fed has blown three consecutive bubbles trying to produce two percent consumer inflation while openly promoting raging bubbles in assets especially housing.

Payback has arrived. Expect very weak growth for years to come as the Fed struggles with inflation and the end of globalization.

Looking ahead, housing rates to be miserable and durable goods (appliances, furniture, cabinets, etc.) miserable along with housing.

By the way, when is the last time existing home sales collapsed 25.9 percent in six months with the economy not in recession?

Housing Bust and Cyclicals the Recession Key

Existing home sales have fallen six consecutive months and 25.9 percent since January. There is no instance where that has happened and the economy was not in recession.

In case you missed it, please see Cyclical Components of GDP, the Most Important Chart in Macro

Also see A Big Housing Bust is the Key to Understanding This Recession

If the data follows the path I expect, we will have a third quarter of negative GDP with real final sales falling since May.

Don't Count on GDI Either

For discussion of GDI vs GDP, please see On an Income Basis the Economy is Humming, GDP says No, Which is Believable?

This post originated on MishTalk.Com.

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