Refinances increased for the first time this year, according to the August Originations Insight Report from Ellie Mae. According to the report, the percentage of closed refinances jumped from 29 percent to 32 percent between July and August.
Additionally, Ellie Mae found that the average 30-year interest rate for all loans rose slightly to 4.92 percent, up from 4.91 percent in July and 4.90 percent in June. The report notes that rate increases have slowed substantially from the movement in the first six months of 2018 from 4.33 percent in January. The rate for Adjustable Rate Mortgages stayed at 6.6 percent for the second consecutive month.
“The rise in interest rates has slowed since June, and we are seeing the percentage of refinances increase month-over-month since May,” said Jonathan Corr, President and CEO of Ellie Mae. “This may reflect consumers taking an opportunity to refinance with the corresponding increase in equity.”
The August Originations Insight Report also found that closing rates for all loans increased to the highest percentage in 2018 at 71.1 percent, up from 70.9 percent the month prior, while closing rates on purchase loans increased to 75.9 percent, up from 75.0 percent the month prior. Additionally, closing rates on refinances dropped slightly to 63.5 percent, down from 63.7 percent in July.
The time it takes to close all loans stayed steady in August as well, at 43 days for the second month. For purchase loans, the time it takes to close increased one day to 45 days in August. The report also found that FICO scores decreased by one point overall.
From Ellie Mae: “The Origination Insight Report mines data from a robust sampling of approximately 80 percent of all mortgage applications that were initiated on the Encompass all-in-one mortgage management solution. Ellie Mae believes the Origination Insight Report is a strong proxy of the underwriting standards employed by lenders across the country.”
Learn more and find the complete Originations Insight Report here.