Ellie Mae’s Origination Insight Report for May 2019 revealed the 30-year note rate dropped for the fifth-consecutive month to 4.52%.
May’s rate of 4.52% is down from April’s rate of 4.61% and a decrease from 4.84% from May 2018.
The report added that the time to close rose slightly from 40 days in April to 42 in May. Refinances closed in 37 days in May, which is a slight increase from the reported 33 days in April. Purchase loans closed in 44 days, increasing by one day from April.
The Origination Insight Report focuses on loans that closed in the specific month, and the closing rate is calculated on a 90-day cycle, not a monthly basis.
All closing times increased year-over-year, as in May 2018 closing times were 41 days, and purchases closed in 43 days. Closing times for refinances was unchanged at 37 days.
“As the 30-year note rate declines for yet another month, we are seeing purchase and refinance activity on the rise,” said Jonathan Corr, President and CEO of Ellie Mae. “Closing rates remain well over 75 percent and with the Mortgage Bankers Association reporting solid purchase volume and new inventory on the rise, we could be in for a very robust summer home buying season.”
The report also found that the percentage of refinances decreased to 32%, while purchased made up 68% of total closed loans. The amount of adjustable rate mortgages fell slightly to 6.7% in May from 6.8% in April.
Black Knight reported earlier this month that declining mortgage rates have resulted in 5.9 million refinance candidates in April, which is an increase of 2 million from March.
According to Ellie Mae, the amount of refinances increased year-over-yer from 30% last May. The total amount of purchases fell year-over-year from 70%.
May’s closing rate increased to 75.6% from 74.8% in April.
Of all loans closed in May, 66% were conventional, 19% were FHA, 10% were VA, and other types of loans came in at 5%.