Interest rates fell to their lowest mark since January 2013, according to the latest Origination Insight Report from Ellie Mae.
The 30-year rate on all loans fell to 3.65% in March from 3.83% for the month prior. Interest rates on 30-year loans through the Federal Housing Agency fell to 3.76% from 3.87%.
Ellie Mae reports that refinances reported for 55% of all loans closed in March, which is an increase from February’s 51% and January’s 50%.
Refinances accounted for 35% of loans closed in March 2019.
“Interest rates continued to decline into March, driving the growing share of refinances for another month,” said Jonathan Corr, President and CEO of Ellie Mae. “Despite the impacts of the coronavirus and stock market fluctuations, our lenders are leveraging technology to manage borrower demand for refinances while taking into account the health and safety of all players in the mortgage origination process. With digital solutions for homebuyers and originators like online applications, remote online notarizations, homeowner-guided appraisals and eClosings, our lenders are able to minimize disruptions to their operations and limit in-person interaction.”
March also saw the time to close on all loans fall to 40 days from the 43 days recorded in February. Closing rate on all loans fell to 78% from February’s 78.3%, and closing rates on purchases fell to 80.2% from the prior month’s 80.7%.
This report comes shortly after Freddie Mac’s Primary Mortgage Market Survey revealed the average rate on a 30-year fixed-rate mortgage averaged 3.31%.
“Mortgage rates continue to hover near all-time lows for the third straight week. As a result, refinance activity remains high, but home purchase demand is weak due to economic tightening,” said Sam Khater, Freddie Mac’s Chief Economist.
Khater continued, “While new monthly economic data are driving markets lower this week, they are a lagging indicator and should be priced in already. Real time daily economic activity metrics suggest that the economy will likely not decline much further. Going forward, the key question is no longer the depth of the economic contraction, but the duration.”