The percentage of closed purchase loans continued to increase, rising four percentage points to 70 percent, according to the most recent Origination Insight Report from Ellie Mae, the leading cloud-based platform provider for the mortgage finance industry. This is the highest percentage of purchase loans recorded since Ellie Mae began tracking data in 2011.
In May, the 30-year interest rate continued to rise to a new high at 4.84 percent, up from 4.79 percent the month prior. The percentage of Adjustable Rate Mortgages (ARMs) held at 6.6 percent for the second month, the highest since June 2014, the report stated.
“The start to the summer home buying season is in full swing and while inventories remain tight, we’re seeing an increasing percentage of purchase loans,” Ellie Mae President/CEO Jonathan Corr said in the report. “Even with the shift to a strong purchase market, closing times have remained steady, hovering around 41 days, and closing rates have increased slightly to just over 70 percent as more lenders take advantage of digital mortgage solutions to drive efficiencies and improve consumer experience.”
Other statistics of note in May included:
- The percentage of refinances decreased across the board with FHA refinances dropping from 22 percent in April to 20 percent in May. Conventional refinances dropped from 38 percent in April to 34 percent in May. VA refinances dropped from 27 percent in April to 25 percent in May.
- The time to close all loans held steady across the board with time-to-close all loans at 41 days for the third month.
- Overall FICO scores increased slightly for the fourth consecutive month to 724. LTV remained at 79 and DTI remained at 26/39.
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.
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/.