Mortgage creations for 2020 hit a record high of $ 4.3 trillion, according to the latest report from Black Knight’s Mortgage Monitor released today.

For the first time ever, loan applications surpassed $ 4 trillion, with refinancings reaching a record high of $ 2.8 trillion and purchases soaring to $ 1.5 trillion – the world’s annual volume. highest since 2005. In the fourth quarter alone, mortgages broke records across the board, with all-time highs for a quarter for purchase loans ($ 346 billion), refi loans ($ 869 billion) and total loans ($ 1.3 trillion).

And, according to Black Knight rate foreclosure data, momentum continued for the first quarter of 2021 despite interest. rates hit nine-month high. The volumes of refinancing loans in the first quarter of 2021 are also expected to be near the record of the previous quarter.

“About 2.8 million homeowners refinanced their mortgages in the last quarter of 2020, which saw a record $ 869 billion in refinancing loans,” said Ben Graboske, president of Black Knight Data & Analytics . “Assuming a 45-day lock-to-close timeframe, Black Knight’s daily rate lockout data through mid-February suggests refi activity may remain stable in Q1 2021. Of course, that is. before a recent 30-year spike in rates is expected to start impacting loan volumes closed at the end of the first quarter or the start of the second quarter. Yet by the end of March, an additional 2.8 million homeowners will have taken advantage of near-record rates to refinance their mortgages. It’s important to remember that this would come with a 25% reduction from Q4 2020 in purchase loans, resulting in an overall quarterly drop of 10%. “

With rates on the rise, Graboske said refi business has been drastically curtailed. Only 12.96 million high-quality refinancing applicants remain in the market, down almost 30% in just three weeks and the smallest of that population since May 2020.

“On top of that, the retention of what is now a declining number of refinancing borrowers remains at historically low levels, with just 18% retained by their servicers. About 2.3 million borrowers were not retained just in the fourth quarter of 2020, ”said Graboske.

Homeowners who refinanced to improve their rate and / or term were held back at a significantly higher rate (23%) than withdrawn refinancers (11%). Meanwhile, those who took out their previous mortgage in 2019 not only generated the highest volume of refis in the fourth quarter (20%), but they were also held at one of the highest rates (24%). ). Borrowers who took out their previous mortgage earlier in 2020 boosted 8% of all Q4 2020 refinances.