Peak Summer Home Buying Sparks Ellie Mae Record

Home loans for purchases are continuing their forward momentum in May, representing 68 percent of total loans, according to Ellie Mae’s Origination Insight Report, which focuses on loans that closed in a specific month and compares characteristics to similar loans that closed three and six months earlier. This is a 3 percent increase from April. Conventional purchase loans increased to 61 percent while FHA purchase loans increased to 82 percent and VA purchase loans increased to 73 percent.

For the first time in 2017, the average 30-year note decreased from 4.41 percent in April to 4.33 percent in May—still up from 4.06 in May 2016. Adjustable Rate Mortgages (ARMs) on Conventional loans continued to rise to 7.5 percent in May, which was 7.3 percent in April and 5.5 percent one year ago. Average closing time on all loans averaged 42 days in May, holding steady from the previous month. The time to close a refinance also held at 41 days whole the time to close a purchase remained at 42 days.

“The start of the peak summer home buying period combined with fewer refinances due to higher interest rates, drove purchases to the largest percentage of total loans since we began tracking data in 2011,” said Jonathan Corr, president and CEO of Ellie Mae. “Home loan purchases represented 68 percent of total closed loans, a 3 percent increase from the prior month.”

Methodology:

The Origination Insight Report mines its application 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.

Ellie Mae also distributes data from its monthly Ellie Mae Millennial Tracker, which focuses on mortgage applications submitted by Millennials during specific time periods.