In March, the percentage of closed purchase loans increased by 6 percent over February, according to the latest Origination Insight Report from Ellie Mae. That brings the total percentage of closed purchase loans to 62. Closing rates on purchase loans took a slight uptick to 76.3 percent.
At the same time, the percentage of closed refinances dropped almost as much, the report indicated. Closed refis were down 5 percent in March, finishing the month at 38 percent. Closing rates on refinances stayed essentially flat at 65 percent.
The percentage of refinances decreased across the board with FHA refinances dropping from 28 percent in February to 23 percent in March. Conventional refinances dropped from 48 percent in February to 43 percent in March, and VA refinances decreased from 33 percent in February to 28 percent in March.
This seesaw comes as 30-year interest rates rose slightly to 4.69 percent, which is the highest rates have been since the beginning of 2014. Interest rates have gone up every month this year, starting at 4.33 percent in January and bumping to 4.48 percent in February.
“With interest rates rising to the highest levels since January 2014, we’re seeing the purchase market continue to gain momentum,” said Jonathan Corr, President, and CEO of Ellie Mae. “As we’ve seen in the past several months, the shift to a purchase market coupled with the adoption of digital mortgage solutions by our customers, aids in driving down the time to close.”
The percentage of adjustable rate mortgages in March grew from 5.5 to 6.3 percent, the report said.
While the time to close all loans in March decreased by a day, to 41, the time taken to close purchase loans dropped two days, to 43. Time to close in January was 47 days and days to close refis stayed unchanged at 37 days.
The report also noted that overall FICO scores increased slightly to 722 and LTV increased slightly to 79. It said that DTI decreased to 26/39.