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Refinances Stable in First Reading of the New Year

Ellie Mae’s January Origination Insight Report revealed that interest rates experienced a slight dip during the first month of 2020, falling from Decembers 3.99% down to 3.96%. Refinances during the month made up 46% of total closed loans—unchanged from the month prior. 

Conventional loan refinancing experienced a hike, rising from Decembers 53% posting to a few percentage points higher at 55%. In contrast, Januarys VA and FHA refinances declined slightly from Decembers showings.

Another rise was reported by Ellie Mae, with its data showing that FICO scores on all closed loans in January rose just a tad from December: 735 to 738, respectively.

Ellie Mae also reported that the time to close all loans remained at 48 days for the second-consecutive month. Regarding sealing the deal, the report revealed that borrowers and buyers can expect to pay more when closing, with closing rates on all loans experiencing an uptick to 78.2% in January versus the previous months rate of 77.8%. Specifically, for purchases, the closing rate in January was 80.7%, while the closing rate for refinances was 75.8%.

The start to 2020 saw interest rates decline and refinances hold steady, driving an increase in our closing rate to 78.2% in January,” said Ellie Mae President and CEO, Jonathan Corr on the Origination Insight Report. 

Corr then proceeded to foreshadow what such movement may mean moving forward into 2020: All indicators show that we will continue to see a healthy housing market in 2020 as more millennials look to purchase homes and interest rates remain at historic lows driving refinance activity. We do expect 2020 to bring some challenges for homebuyers, not because of what they can afford but rather what they can find due to lagging inventory.

About Author: Andy Beth Miller

Andy Beth Miller is an experienced freelance editor and writer. Her main focus is travel writing, and when she is not typing away from her computer at her home in the Hawaiian Islands, she is regularly roaming the world as a digital nomad, and loving every minute of it. She has been published in myriad online and print magazines, is a fan of all things outdoors, and finds life (and all of its business, technological, and cultural facets) fascinating in their constant evolution. She is excited to spectate as the world changes, and have a job that allows her to bring a detailed account of those constant shifts to her readers at home and abroad.
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