At Curinos, we believe, and our data confirm, that not all markets are created equal – variation in regional (state-to-state) pricing is on the increase. That’s because, one, competition for a shrinking total addressable market is intensifying and, two, lenders are becoming more sophisticated and rigorous in their strategies for pricing by localized markets and preserving margin. We know this from our Weighted Average Market Price (WAMP), a metric that, at the lender level, adjusts an indicative market price according to actual market originations.
As a result, WAMP not only provides a more accurate reflection of the loans executed in the market, but it also minimizes the influence of market anecdotes or hearsay. When comparing conforming 30-year-fixed market average, for example, WAMP reveals as much as a 64 bp difference in the West Region compared with only 19 bp in the Southwest (see chart). And when coupled with Curinos’ ability to overlay price-concession and exception data, WAMP delivers the most precise market price assessment available.
As lenders look for accretive revenue strategies while minimizing impact to market share in the new year, or growing their market share more ambitiously, refined pricing will be essential. WAMP can be the invaluable cornerstone of these efforts.
WAMP reveals up to 100 bp of variation across national regions, and a high level of price variation relative to the market average.
Conforming 30:
WAMP vs. Market Average
FHA 30: WAMP vs. Market Average
Source(s): Curinos Analysis. Rolling 30 Day Pricing Average; Annualization Reflects Projected Funded Volume Across Aforementioned MSAs; Evaluation at 7.375% and 6.75% for CF30/FHA30 Respectively.
