Purchase loan share picked up more ground in March as mortgage rates climbed further, according to the latest Origination Insight Report from Ellie Mae
Ellie Mae's data, which reflects findings from approximately 44 percent of applications initiated on its Encompass origination platform, shows purchase share rose to 38 percent in March--an increase of 6 percentage points over February--while refinance share fell back to 62 percent.
""In March, the average 30-year note rate for closed loans edged up slightly to 3.813 percent. While this was at its highest point since last July, from an historical perspective it was still very low,"" explained Jonathan
Corr, president and COO of Ellie Mae. ""This slight increase didn't dampen the continuing strength of the purchase market.""
Conventional mortgages made up 72 percent of total loans--up slightly from February--while mortgages insured by the Federal Housing Administration (FHA) accounted for 20 percent of loans tracked.
In order to get a meaningful view of lender ""pull-through,"" Ellie Mae reviewed a sampling of loan applications initiated 90 days prior (in December 2012) to come to an overall closing rate of 55.1 percent in March--down from 56.8 percent in February. Closing rates fell for both refinance and purchase loans (to 52.8 percent and 59.7 percent, respectively).
While closing rates fell, so too did the average FICO score for closed loans. According to Ellie Mae's report, the average score for loans closed in March was 743, the lowest level recorded since the company began tracking in August 2011 (when the average score was 741). The average FICO score for a loan denied in March was 702, down from 705 the prior month.
Meanwhile, the overall time to close a loan dropped from 50 days in February to 46 days in March--good news for buyers in a time-sensitive spring purchase market, Corr said.