According to the August Origination Insight Report from Ellie Mae®, the leading cloud-based platform provider for the mortgage finance industry, the 30-year note rate dropped for the eighth consecutive month to 4.07 percent, down from 4.18 percent in July. The drop in interest rates month-over-month continues to drive up the percentage of refinances, which accounted for 43 percent of all loans in August, up from 38 percent the month prior. Purchase percentages as a share of all loans dropped under 60 percent for the first time in 2019.
Closing rates are also on the rise with the closing rate on all loans at 77.3 percent, up from 77.0 percent in July. Closing rates on purchases increased to 80.0 percent in August, up from 79.3 percent in July, while closing rates on refinances dropped slightly to 72.5 percent in August, down from 72.9 percent the month prior.
Other statistics of note in August included:
- The time to close all loans held steady at 42 days in August. The time to close a refinance loan decreased to 39 days, down from 40 days the month prior, while the time to close a purchase loan increased from 43 days in July to 45 days in August.
- The percentage of Adjustable Rate Mortgages (ARMs) decreased to 5.3 percent, down from 5.7 percent in July.
“Interest rates continue to decline and we’re seeing homeowners capitalize on the refinance opportunity throughout the month of August,” said Jonathan Corr, president and CEO of Ellie Mae. “As we enter the fall and the market expects further rate cuts from the Fed, we will watch to see if the share of refinances continues to climb further.”
The Origination Insight Report mines data from a robust sampling of approximately 80 percent of all mortgage applications that were initiated on the Encompass® all-in-one mortgage management solution. Ellie Mae believes the Origination Insight Report is a strong proxy of the underwriting standards employed by lenders across the country.
In addition to the Origination Insight Report, Ellie Mae also distributes data from its monthly Ellie Mae Millennial Tracker on the first Wednesday of each month. The Ellie Mae Millennial Tracker focuses on mortgage applications submitted by borrowers born between the years 1980 and 1999.
|
MONTHLY ORIGINATION OVERVIEW FOR AUGUST 2019 |
|||||||||
|
|
Aug. 2019* |
|
Jul. 2019* |
|
6 Months Ago (Feb. 2019*) |
|
1 Year Ago (Aug. 2018*) |
||
|
Closed Loans |
|||||||||
|
Purpose |
|||||||||
|
Refinance |
43% |
|
38% |
|
36% |
|
32% |
||
|
Purchase |
57% |
|
62% |
|
65% |
|
68% |
||
|
Type |
|||||||||
|
FHA |
17% |
|
19% |
|
19% |
|
20% |
||
|
Conventional |
69% |
|
66% |
|
64% |
|
66% |
||
|
VA |
10% |
|
10% |
|
11% |
|
10% |
||
|
Days to Close |
|||||||||
|
All |
42 |
|
42 |
|
43 |
|
43 |
||
|
Refinance |
39 |
|
40 |
|
35 |
|
38 |
||
|
Purchase |
45 |
|
43 |
|
47 |
|
46 |
||
|
Percentage of ARM and Fixed Loan Volume |
|||||||||
|
ARM % |
5.3% |
|
5.7% |
|
7.6% |
|
6.6% |
||
|
30-Year Rate |
|||||||||
|
Average |
4.07% |
|
4.18% |
|
4.86% |
|
4.92% |
||
|
*All references to months should be read as month ended. |
|||||||||
|
PROFILES OF CLOSED LOANS FOR AUGUST 2019 |
|||
|
|
|
|
Closed First-Lien Loans |
|
|
FICO Score (FICO) |
|
734 |
|
|
Loan-to-Value (LTV) |
|
78 |
|
|
Debt-to-Income (DTI) |
|
24/37 |
More information and analysis of closed and denied loans by loan purpose and investor are available in the full report at http://www.elliemae.com/about-us/news-reports/ellie-mae-reports/.
To get a meaningful view of lender pull-through, Ellie Mae reviewed a sampling of loan applications initiated 90 days prior—or the May 2019 applications—to calculate an overall closing rate of 77.3 percent in August 2019 (see full report).
About the Ellie Mae Origination Insight Report
The Origination Insight Report focuses on loans that closed in a specific month and compares their characteristics to similar loans. The closing rate is calculated on a 90-day cycle rather than on a monthly basis because most loan applications typically take one-and-a-half to two months from application to closing. Loans that do not close could still be active applications or applications withdrawn by consumers or denied for incompleteness or non-qualification.
The Origination Insight Report details aggregated, de-identified data pulled from Ellie Mae’s Encompass origination platform.
News organizations have the right to reuse this data, provided that Ellie Mae, Inc. is credited as the source.
About Ellie Mae
Ellie Mae is the leading cloud-based platform provider for the mortgage finance industry. Ellie Mae’s technology solutions enable lenders to originate more loans, lower origination costs, and reduce the time to close, all while ensuring the highest levels of compliance, quality, and efficiency. Visit EllieMae.com or call (877) 355-4362 to learn more.
© 2019 Ellie Mae, Inc. Ellie Mae®, Encompass®, AllRegs®, Mavent®, Velocify®, the Ellie Mae logo and other trademarks or service marks of Ellie Mae, Inc. appearing herein are the property of Ellie Mae, Inc. or its subsidiaries. All rights reserved. Other company and product names may be trademarks or copyrights of their respective owners.
View source version on businesswire.com: https://www.businesswire.com/news/home/20190918005129/en/