Mortgage originations rose 12.7 percent year over year and dipped a slight 1.5 percent month to month in June, indicating stability despite increases in interest rates, according to a monthly report from Lender Processing Services.
Through June, originations had their strongest 12-month period since 2007, to 784,000, LPS said.
Prepayment activity, which is historically a good indicator of mortgage refinances, is still largely driving origination volume, the company said.
“Prepayment speeds have been impacted by the sharp increase in mortgage interest rates we’ve seen over the last couple months. However, even with that increasing interest rate pressure, July’s monthly prepayment rates are still about where they were this time last year, when rates were at historic lows,” said LPS Data & Analytics Senior Vice President Herb Blecher in a statement.
“In fact, they are roughly at the same levels as the heights of the ‘mini refinance booms’ in 2010 — when interest rates were comparable to where they are today — and in 2009, when rates were even higher.
“Of course, as interest rates continue to climb, we can expect that both prepayments and associated originations will decline.”
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