According to a new analysis by ICE Mortgage Technology, the time to close all loans decreased in Q1 of 2021, from 58 days in January to 52 days in March. The time to close all purchase loans decreased over the quarter, from 57 days in January, to 53 days in February, and down to 51 days in March. Refis saw similar decreases in days-to-close, falling from 59 days in January, to 52 in both February and March.
“We’re seeing a compelling reduction in the time to close a mortgage as we continue into 2021,” said Joe Tyrrell, President of ICE Mortgage Technology. “Part of the reason is lenders are continuing to adopt digital mortgage tools to improve their loan origination process and serve homebuyers more efficiently, for example eClose, which makes for a more streamlined process that saves time, and that shift is showing up in the data.”
And with purchase originations on track to grow 16.4% to a new record of $1.67 trillion in 2021, an increasing number of lenders are adopting new technologies, advancing their eClose efforts to keep up with the volume.
“The ultimate goal is for eClose to be the standard in the industry, and to drive adoption by building an ecosystem that users are comfortable with, but one that’s better than what is currently available in the market,” said Nancy Alley, VP of Product Strategy of ICE Mortgage Technology in a recent release.
Closing rates increased slightly for the month on all loans, increasing from 76.4% in February, to 77.9% in March, and closing rates on refinances increased from 76.3% to 78% month-over-month. Closing rates on purchases increased from 77.1% in February to 78.1% in March.
According to the ICE March Origination Insight Report, the percentage of refis dropped from 68% of all closed loans in February, to 63% of all closed loans in March. The percentage of purchases increased to 36% of total closed loans for the month of March, up from 32% the month prior.
“After months of near record numbers of refinances, it is clear that the pandemic has shifted how people view their homes and in doing so, prompted homeowners to refinance, often in order to access the equity,” said Tyrrell. “As we enter the summer home buying months, if we continue to see higher than normal refinance volumes, as some homeowners commit to staying in their current homes, it will mean new buyers face an even more competitive purchase market driven by tight supply.”