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The purchase loan share of the mortgage originations market continues to grow, according to the latest data from Ellie Mae. In April, purchase loans made up 63 percent of originations, up from 60 percent a month earlier and significantly higher than 42 percent a year ago.
The refinance share of the market, necessarily then, is declining, falling to 37 percent in April, according to Ellie Mae.
"This is the highest percentage of purchase loans we've seen since we began reporting data in August 2011 and two percentage points higher than the previous high of 61 percent in October 2013," said Jonathan Corr, president and COO at Ellie Mae.
Another significant finding in Ellie Mae's Origination Insight Report for April is the continuing decline in the number of days it takes a loan to close. April marked the third consecutive month of declining days to close and the first time on Ellie Mae's record the number has fallen below 40.
The average loan originated in April took 39 days to close, down from 40 in March and 46 a year ago. Purchase loans took a few days longer to close than refinance loans—as usual.
Purchase loans originated in April took 40 days to close, down from 41 in March, while refinance loans took 37 days to close, unchanged from March.
A sign of loosening credit standards, one-third of loans closed in April went to applicants with FICO scores under 700, up 10 percentage points from 23 percent in April 2013, according to Ellie Mae.
However, the average FICO score on all first-lien loans closed in April remains above 700, at 726. This rate has grown slightly from 724 at the start of the year but remains below last year's overall average of 738.
The average FICO score of a loan denied in April was 690. This rate is also lower than the 2013 average, which was 699.
The average loan-to-value ratio for a first-lien loan closed in April was 82, remaining unchanged over the first four months of this year.
The average debt-to-income ratio for a loan closed in April was 24/37, unchanged from March and little changed since the start of the year.
Adjustable-rate mortgages continue to grow in market share, claiming 7.6 percent of the market in April, up from 7.4 percent in March and more than twice the market share recorded in April 2013—3.2 percent.
On the other hand, 15-year loans have fallen in share since last year, declining from 15.3 percent in April 2013 to 12.2 percent in April 2014.
The Federal Housing Administration's market share remained steady at 22 percent, the same as both last month and last year.
Conventional loans made up 64 percent of the mortgage originations market in April, down 1 percentage point from a month earlier and 4 percentage points from a year ago.
