Mortgage foreclosures in November driven by strong refinancing activity

Purchases fell 22% from October and 6% year-on-year as high home prices and low inventory levels continued to curb demand, the report said. report.

The Optimal Blue Mortgage Market Indices (OBMMI) 30-year conforming fixed rate – the benchmark for CME Group‘s mortgage rate futures fell 1 basis point to 6.14% in November, an improvement of 53 pbs from a year earlier.

Federal Housing Administration (FHA) rates fell to 5.99%, while The U.S. Department of Veterans Affairs (VA) and jumbo rates increased to 5.76% and 6.44% respectively. Meanwhile, ten-year government bond yields fell to 4%, widening the mortgage interest rate differential by about 10 basis points, while the OBMMI remained stable.

“November’s data underlines a market that is still reacting to rate cuts even as seasonal patterns emerge,” said Mike Vough, senior vice president of corporate strategy at Optimal Blue. “Refinancings clearly remain the highlight, with interest rate and forward activity at more than triple last year’s levels and disbursements continuing to outperform. It was a remarkably strong November by all accounts.”

In the secondary market, overall execution strategies also changed in November, Vough points out.

“Lenders moved into the cash window as securitization momentum waned and price differentials widened as more loans exited the prime segment.”

Agencies’ deliveries of mortgage-backed securities fell 100 basis points to a 45% market share after six straight months of gains. Aggregator share fell 300 basis points to 27%, while best-efforts rose to 3%. Prices also fell: the share of the highest prices fell to 79%, while the value of mortgage rights for 30-year conforming loans fell by 3 basis points to 1.09%.

Refinancings accounted for 35% of all closings. Non-qualified mortgage (non-QM) products reached a record 9% share, driven by investor loans and debt service coverage ratio (DSCR). FHA and non-conforming products gained ground, supported by FHA rates below 6%, while the share of planned unit development (PUD) in slots rose modestly but remained below last year’s high levels.

Borrower and product profiles also changed. FHA share rose to 18.8% of closings, while non-conforming loans rose to 17%. US citizens accounted for almost 94% of the locks. The average credit score fell to 733, and the average loan amount dropped to $391,323, ranging from $592,129 in the New York City metro area to $295,526 in Indianapolis.