Ellie Mae’s June Origination Insight Report revealed interest rates for all closed loans decreased, falling 3.4% from May’s 3.43%.
As for the 30-year rate on conventional loans, June’s data showed that decreased as well, dropping down to 3.42% from May’s 3.44% rate. Likewise, loans backed by the Federal Housing Agency (FHA) saw 30-year rates dip in June, down to 3.41% from May’s 3.45% rate. Regarding VA loans’ 30-year rate, those dropped as well during June, falling all the way down to 3.2% from May’s 3.24% rate.
Thanks to these declines, the purchase market experienced a boost and rebounding positively. Specifically, the purchase market was responsible for 42% of all closed loans during June, a statistic that rose an impressive 35% from May. Refinances accounted for 58% of all closed loans—down from the prior months’ 65%.
Noteworthy information also divulged by Ellie Mae included the fact that the window for closing all loans widened (now being 47 days versus May’s 45 days). In contrast, the window for closing purchase loans narrowed, down to 46 days from May’s 47 days. Regarding refinancing loans, that window for closing widened to 48 days from May’s 44 days window.
Ellie Mae’s report also highlighted June’s FICO scores, which increased on all June loans (to 751 from May’s 750). Following suit, FICO scores (month-over-month) for purchase and refinances across Conventional, FHA, and VA loans also rose. Regarding closing rates, those decreased to 73.4% during the month of June, falling from May’s 76%.
Jonathan Corr, President and CEO of Ellie Mae, offered his expert insight on the current market: "Interest rates decreased for the sixth consecutive month and we’re seeing a rebound in the purchase market which now represents 42% of all closed loans, a 7% increase from May. Homebuyers are taking advantage of these historically low rates to both buy and refinance but it does appear that lenders are looking for borrowers with better credit across all mortgage products as FICO scores have continued to increase across the board since March.”