Ellie Mae: Uptick in Home Purchase Percentage as Interest Rates Rise to Four-Year High

Ellie Mae, Pleasanton, Calif., said closed purchase loans increased to 62 percent of total closed loans in March, up 6 percent from February.

The company’s monthly Origination Insight Report said the percentage of closed refinances decreased to 38 percent in March, down from 43 percent in February.

Ellie Mae President and CEO Jonathan Corr said this comes as 30-year interest rates continued to rise to 4.69 percent, up from 4.48 percent in February and 4.33 percent in January, the highest rate since January 2014. Additionally, the percentage of adjustable-rate mortgages increased from 5.5 percent in February to 6.3 percent in March.

“With interest rates rising to the highest levels since January 2014, we’re seeing the purchase market continue to gain momentum,” Corr said. “As we’ve seen in the past several months, the shift to a purchase market coupled with the adoption of digital mortgage solutions by our customers aids in driving down the time to close.”

The report said closing rates on purchase loans rose to 76.3 percent, up from 75.7 percent the month prior, while closing rates on refinances decreased slightly from 65.0 percent in February to 64.9 percent in March.

Other report findings:

–The percentage of refinances decreased across the board with FHA refinances dropping from 28 percent in February to 23 percent in March. Conventional refinances dropped from 48 percent in February to 43 percent in March, and VA refinances decreased from 33 percent in February to 28 percent in March.

–The time to close all loans decreased slightly from 42 days in February to 41 days in March. Time to close purchases dropped to 43 days in March, down from 45 days in February and 47 days in January.

–Overall FICO scores increased slightly to 722. LTV increased slightly to 79 and DTI decreased to 26/39.