According to the most recent Ellie Mae Originations Insight Report, purchase loanscontinue its second month soar to record a 63 percent increase in purchase originations. This is an increase from February’s 57 percent and January’s 53 percent. This has been the highest in the book since July last year when the total percentage of purchase share climbed to 65.
Ellie Maeis a premier provider of software services for the residential mortgageindustry. The report analyzes trend in closed loans within the most recent three to six months.
In the report, all purchase originations increased while refinances continued its downward trend. FHA purchase loans made up 79 percent of originations, a 4-point increase from the previous month’s 75 percent. Conventional loans increased to 56 percent. In February, conventional loan purchase originations was at 48 percent. Meanwhile, VA loan purchases soared to 70 percent, a 5 percentage point increase from the previous two month’s 65 percent.
One of the most notable numbers in the report is that homes stay less in the market, translating into numbers the combined effort of legislation and processing innovations that allow lenders to speed up loan processing.
The average closing time for purchase loans for March decreased to 43 days compared to 46 days in February. This has been the shortest time on record since February of last year. This is the case not only with purchases but also with refinances, which similarly close at an average of 43 days. In February, the average closing time for refinance loans was at 45 days; the month before, it was at a median of 48 days. Overall, closing time across all loan types decreased to 43 days in March from 46 days in February.
Commenting on this trend, Ellie Mae CEO Jonathan Corr says, “We [also] saw the time to close shrink to the shortest duration since February of 2015 at 43 days across all closed loans, purchases and refinances, as Ellie Mae lenders automate more mortgage processes to improve efficiency, quality and compliance.”
- The average 30-year rate for all loans increased from 4.36 percent in February to 4.39 percent in March.
- For all loan types, closing rates decreased to 67.9 percent. The refi closing rate declined to 64.4 percent while closing rate for purchases also decreased to 74.8 percent. This is accounting for the percentage of loan applications in the previous 90-day cycle that have closed.
- Of all closed loans, 68 percent of the borrowers had FICO scores of over 700. This is made up of 71 percent of purchase loan borrowers and 66 percent of refinance loan borrowers who have scores over 700.
- The average FICO score on all closed loans increased to 721 in March from 720 in February.
- For FHA purchases, the average FICO score decreased to 684 while for FHA refinances, median FICO score increased to 654.