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Another Month, Another Decrease in Mortgage Rates

Mortgage Rates

Ellie Mae’s July Origination Insight Report found that the 30-year mortgage dropped for the seventh-consecutive month to 4.18%

The drop from the prior month’s 4.40% also led an increase in refinances. Refinances in July accounted for 38% of all loans—an increase from June’s 31%. 

“Shrewd homeowners are locking in lower interest rates, which has driven the spike in refinance activity in July,” said Jonathan Corr, President and CEO of Ellie Mae. “And with the Federal Reserve cutting rates further, we expect to see continued activity as homebuyers are able to stretch their dollar and enter the market.”

Seeing a drop in July was purchase percentages, which fell from 69% in June to 62% in July. 

Ellie Mae also reported that closing rates rose to a new high, with the closing rates on all loans at 77%, which is a slight increase from the previous month’s 76.8%. Closing rates on refinances fell slightly to 72.9% from June’s 73.4%. 

Closing times on all loans remain unchanged at 42 days in July, while the time to close on refinances increased from 38 days to 40 days. The time to close on purchases fell from 45 days in June to 43 days in July. 

The volume of Adjustable Rate Mortgages fell to 5.7% from 6.3% in June, and the average FICO scores held at 731 for the second-consecutive month. 

Despite free-falling mortgage rates, information from Axios reveals homeownership rates falling across all age and income levels. 

From 2002 to 2018, the homeownership rate for ages 35-64 have fallen, and some by nearly 10%. 

“The homeownership rate started to decline in 2004–2005 in the middle of the housing boom. For all the record issuance of subprime mortgages, option ARMs and NINJA loans, the rate declined, at almost exactly the same rate at which it continued to deteriorate during the worst years of the financial crisis,” says the report. “Even the post-crisis recovery didn't change things. Only in the past couple of years have homeownership rates ticked up a tiny bit.”

Axios revealed that the homeownership rate for those younger than 35 fell from 43% in 2004 to 36% in 2018. The 35-44-year-old age group declined from its peak at 69% in 2005, to 60% last year. 

About Author: Mike Albanese

A graduate of the University of Alabama, Mike Albanese has worked for news publications since 2011 in Texas and Colorado. He has built a portfolio of more than 1,000 articles, covering city government, police and crime, business, sports, and is experienced in crafting engaging features and enterprise pieces. He spent time as the sports editor for the "Pilot Point Post-Signal," and has covered the DFW Metroplex for several years. He has also assisted with sports coverage and editing duties with the "Dallas Morning News" and "Denton Record-Chronicle" over the past several years.
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