According to the January Origination Insight Report from Ellie Mae, refinances increased to 35 percent in January, up from 29 percent in December 2018. The report analyzed data from approximately 80 percent of all mortgage applications initiated with Ellie Mae to calculate the total percentage. FHA refinances increased to 21 percent from 18 percent, and conventional refinances are up from 31 percent to 35 percent. Adding further insight into the increase, Jonathan Corr, President and CEO of Ellie Mae, stated: “The increase in refinances in January is likely due to seasonality with lower purchase volume tied to the holiday season as well a modest drop in rates from November and December.”
Additional findings showed that the time to close a refinance dropped to 38 days, while time to close a purchase loan increased to 48 days, and the time to close all loans dropped from 47 to 45 days between December and January.
The 30-year note rate dropped from 5.17 percent in December to 5.01 percent in January. More decreasing numbers in January: the 30-year note rate fell from 5.17 to 5.01 percent, overall FICO scores dropped two points from 726 to 724, and the percentage of Adjustable Rate Mortgages decreased from 9.2 percent to 8.6 percent. VA loan rates also saw a slight drop from 5.04 to 4.83 percent.
Looking ahead, Corr added, “We anticipate that as we move into the traditionally busier spring months, the percentage of home purchases will increase relative to refinances.”
The Origination Insight Report gathers data from a sampling of approximately 80 percent of all mortgage applications that were initiated on the Encompass all-in-one mortgage management solution. Ellie Mae stated that the report is a strong proxy of the underwriting standards employed by lenders across the country.
You can read the full report here.