After sliding for four straight months, the share of purchase loan volumes ticked up in December, according to a survey [1] released Monday.
Calculating from a sampling of mortgage applications initiated on its Encompass platform, technology provider Ellie Mae [2] estimated this week that home purchase mortgages accounted for 56 percent of lending activity last month, up from 54 percent in November.
Before December, purchase mortgage share had been on the decline as falling interest rates spurred more refinancing activity.
"While many observers thought rates would rise last year, lenders were instead treated to at least a little more refinancing volume," said Jonathan Corr, president and COO of Ellie Mae. "The fact that lenders are closing purchase loans at higher rate is great news as we head toward the spring home buying season."
The average 30-year fixed rate in December was 4.25 percent, according to Ellie Mae, slightly down from November.
As purchase volumes rose, so did the closing rate for that category: Using a sampling of applications initiated 90 days prior, the company calculated a closing rate of 67.1 percent for purchase mortgages, up from 66.5 percent in November and a record high. The closing rate for refinances stayed flat at 51.2 percent.
The time it took to close a mortgage last month was up all around, averaging 42 days for both purchase mortgages and refinances.
For all loan types, including conventional and government-backed mortgages, credit requirements were steady over the month, with the average FICO slipping one point to 728 and the average loan-to-value (LTV) ratio holding at 80 percent for closed loans.
For denied applications, the average FICO score edged up one point to 679, while the average LTV rose 1 percentage point to 80 percent.
In practice, the small changes seem to have had no real effect. According to Ellie Mae, 31 percent of closed loans in December had average FICO scores below 700, the same as a year ago.