The 30-year note rate fell for the eighth-consecutive month to 4.07% in August from the prior month’s 4.18% Ellie Mae reported in its latest Origination Insight Report.
Refinances accounted for 43% of all loans in August, which is an increase from 38% the month prior. Purchase percentages as a share of all loans fell under 60% for the first time this year.
“Interest rates continue to decline and we’re seeing homeowners capitalize on the refinance opportunity throughout the month of August,” said Jonathan Corr, President and CEO of Ellie Mae. “As we enter the fall and the market expects further rate cuts from the Fed, we will watch to see if the share of refinances continues to climb further.”
Black Knight report earlier this month that the 0.5-point increase in the 30-year fixed rate mortgage cost nearly 2 million people eligibility for refinancing.
The refinance population, according to Black Knight, fell back to 9.8 million. The refinance population was at a record 11.7 million last week week when the average mortgage rate was 3.49%.
Calculations from Black Knight show the average borrower can save $269 per month.
Andy Walden, Black Knight’s Director of Market Research, said he expects the refinance market to remain strong the remainder of the year if the 30-year rates stay within 3.5% to 3.7%.
According to Ellie Mae, closing rates of all loans rose slightly to 77.3% from July 77%. Closing rates on purchases rose to 80% from the previous month’s 79.3% and closing rates on refinances fell from 72.9% to 72.5%.
Additionally, it took 42 days to close a loan in August, which is unchanged from July. Closing on a refinance loan fell one to day 39 days and closing on a purchase loan increased to 45 days from 43 days in July.
The percentage of adjustable rate mortgages fell to 5.3% from 5.7% in July. The share of borrowers using a conventional loan increased to 69% from 66% the month prior.