Mortgage rates near a one-year low boosted prepayments in April as homeowners refinanced or bought new properties, according to Black Knight.
The prepayment rate on first-lien U.S. mortgages rose 17% from March to 0.99%, bringing the three-month aggregate increase to 67%, the company said in its “First Look” report. Compared with the year-earlier month, April prepayments were up almost 18%.
Mortgage delinquencies fell to 3.47%, the lowest in records dating back to 2000, Black Knight said in the report. The one-month decline in the delinquency rate was the largest change on record, the mortgage data firm said.
The lowest delinquency rates were seen in Colorado, Oregon, Washington, Idaho and North Dakota, according to the report. The states with the highest delinquency rates were: Mississippi, Louisiana, Alabama, West Virginia, and Arkansas, the company said.
Serious delinquencies fell to a 12-year record low according to the report. Despite the decline, foreclosure starts rose 4.28% in April, putting the total at 41,400. Measured from a year ago, new foreclosures were down 16%.
The average U.S. rate for a 30-year fixed mortgage was 4.07% for the week ending May 16, one basis point away from the one-year low recorded at the end of March, according to Freddie Mac. The rate probably will average 4.3% this year, down from 4.6% in 2018, the mortgage financier said in a forecast on its website.
Cheaper rates probably will boost the refinancing share of mortgage originations to 33% this year from 30% in 2018, Freddie Mac said. That should push mortgage originations for refinances to $569 billion from $487 billion, according to the forecast. Purchase originations probably will rise to $1.16 trillion this year from $1.15 trillion in 2018, Freddie Mac said.