• Homebuying activity could be on the rebound nationwide, predicated by a 43% surge in mortgage rate lock activity in March compared to February.
• In Florida, the Miami-Fort Lauderdale-West Palm Beach metro market ranked 9th in total mortgage origination volume, while Tampa-St. Pete-Sarasota fell from 15th to 16th place, and the Orlando-Sanford metro area dropped out of the Top 20.
• Despite positive trends, housing experts remain cautious due to ongoing economic challenges such as high inflation, steep interest rates, geopolitical uncertainties, and recession fears, as well as a limited housing supply and affordability challenges for first-time homebuyers.

Residential real estate appears to be on the rebound across the nation, according to the latest mortgage data from Jacksonville-based Black Knight, Inc., which released its Originations Market Monitor report on Monday. The report shows a significant increase in mortgage rate locks in Florida and across the nation. “Rate locks” are agreements between a borrower and a lender that guarantees a specific interest rate on a loan for the purchase of a home. The increase in rate locks nationally suggests that more people are locking in mortgage interest rates and will likely close on residential real estate in the coming weeks.

In March, rate lock dollar volumes rose 43 percent compared to February, fueled by seasonal trends, falling interest rates, and stronger performance in the housing purchase market.

In Florida, however, the news was mixed. The Miami-Fort Lauderdale-West Palm Beach metro market ranked 9th in the nation for total mortgage origination volume, up one place from last month, while Tampa-St. Pete-Sarasota fell from 15th to 16th place. And the Orlando-Sanford metro area fell out of the Top 20.

Another factor that may be hindering holding Miami back – the area led the nation in home value price increases in February, which may dampen homebuying activity in the area.

Notably, the March increase of 43 percent is well above the average gain of 30 percent observed between February and March over the past five years. Cash-out refinances were up 31 percent and rate/term locks grew by 36 percent, but both remain historically low.

The Federal Housing Administration (FHA) saw its lock volume capture additional market share, accounting for 20 percent of the March mortgage pipeline, up from 18 percent at the beginning of the year and 12 percent a year earlier. The disproportionate rise in purchase locks pushed refinance volumes to a current cycle low, with a 13 percent share of the pipeline.  FHA mortgages are designed to help low-to-moderate income borrowers who may not qualify for conventional loans due to less-than-perfect credit or limited funds for a down payment.

“It is not unusual for rate locks to surge in March ahead of the spring homebuying season, although this year’s rise outpaced what we typically see on a seasonal basis,” said Andy Walden, Vice President of Enterprise Research at Black Knight. “A cooling market lacking the multiple bids and all-cash offers of the recent past has made sellers more receptive to FHA offers.”

Walden said that the rate-sensitive housing market was affected by March’s interest rate fluctuations. He said that early in the month, rates climbed back toward 7 percent, reaching 6.8 percent and putting downward pressure on homebuying activity. However, rates eventually decreased to 6.4 percent by the end of the month, leading to another surge in mortgage originations.

Despite these positive trends, housing experts remain cautious due to ongoing economic challenges such as high inflation, steep interest rates, geopolitical uncertainties, and recession fears. The limited housing supply and low inventory levels also continue to keep prices high and present affordability challenges for first-time homebuyers.