The second quarter recorded the largest quarterly origination volume in its history. According to Black Knight data released Tuesday, nearly $ 1.1 trillion in real estate liens were accrued in the quarter.
"Although the nation was hit by a pandemic for much of the quarter, there was a record-breaking increase in mortgage origins in the second quarter of 2020, driven by the record-low interest rate environment," said Ben Graboske, president of Black Knight Data & Analytics. "Nearly $ 1.1 trillion in first lien mortgages was raised in the second quarter of 2020. This is the largest quarterly origination volume we have seen since the metric was first reported in January 2000."
Refi loans were up more than 60% from the previous quarter and up more than 200% from the second quarter of last year, which is nearly 70% or all of the originals of the second quarter by dollar value. Black Knight said origins of purchases decreased 8% year over year as COVID-19 impacted the traditional spring home buying season. However, data on mortgage lockdowns – a key indicator of lending – suggests that the home-buying season has not been canceled, just postponed to the third quarter.
} Purchase bans in the third quarter of 2020 have already offset the losses of a second quarter hit by COVID – and a few more – based on normal seasonal expectations, ”said Graboske. “Indeed, interest rate freezes suggest that third quarter lending could break through typical seasonal trends and climb 30-40%, which would take us to a new record high. While refinancing activity was at a record high in the second quarter, the Refi-Lock data suggests that refinancing volumes could increase further in the third quarter. "
According to Graboske, Refis' bans, which are expected to close in the third quarter, are already up 20% over the second quarter, assuming the ban on closing is 45 days.
"Given current market conditions and the recent delay in the 50 basis point fee for GSE refinancing through December, we would expect the near-record low interest rates to continue to spur the market," he said. "After all, there are still almost 18 million homeowners with good credit ratings and at least 20% equity who can lower their current mortgage by at least 0.75% by refinancing."