Ellie Mae’s September Origination Report found that 49% of all loans closed for the month were refinances, as the number of purchases fell to 51%—the lowest percentage since March 2015.
September was also the first month in 2019 that conventional refinances rose to more than 50% of total conventional loans, also accounting for 55% of conventional loans for the month. Conventional purchases fell to 45%, FHA refinances increased to 28% from 27%, while FHA purchases dropped to 72%.
Refinances for VA loans rose month-over-month from 34% to 37%.
“The continued decline in interest rates is driving the refinance revitalization that is now accounting for almost 50% of all closed loans in the month,” said Jonathan Corr, President and CEO of Ellie Mae. “The market is still anticipating further rate cuts by Treasury, so lenders should capitalize on leveraging technology to ensure they are responding to the growing number of refinance opportunities that come their way.”
Ellie Mae reports that the time to close all loans rose slightly to 43 days from 42 days the month before. Time to close a refinance loan was unchanged at 39 days and closing on purchase loans rose to 46 days in September—a marginal increase form 45 days in August.
The share of adjustable rate mortgages fell 4.7%, which is down from August’s 5.3%. The average FICO score for all closed loans increased to 737 from 734 the month prior.
Ellie Mae also found that the average 30-year mortgage rate fell for the ninth-consecutive month to 3.93% from 4.07% in August.
Freddie Mac’s latest Primary Mortgage Market Survey revealed that the average 30-year fixed-rate mortgage rose slightly to 3.69%.
“Despite this week’s uptick in mortgage rates, the housing market remains on the upswing with improvement in construction and home sales,” said Sam Khater, Freddie Mac’s Chief Economist. “While there has been a material weakness in manufacturing and consistent trade uncertainty, other economic trends like employment and homebuilder sentiment are encouraging.”