Closed Purchase Loans Increase Despite Low Inventories

Ellie Mae, Pleasanton, Calif., said closed purchase loans increased in September to 71 percent of total loans.

The company’s monthly Originations Insights Report said closing rates on purchase loans increased to 76.4 percent, up from 75.9 percent the month prior. Closed refinances represented 29 percent of total closed loans, returning to the July average. Closing rates on refinances increased to 64.4 percent in September, up from 63.5 percent in August.

The report said the average 30-year interest rate for all loans decreased for the first time in 2018 to 4.91 percent, down from the 2018 high of 4.92 percent in August. The percentage of adjustable-rate mortgages increased to 7.2 percent in September, up from 6.6 percent in August.

“We see refinances remain at a low percentage of aggregate closed loans and purchase inventory continues to be tight as we move into the fall,” said Jonathan Corr, president and CEO of Ellie Mae. “We did see the first reduction in interest rates this month and with that, the percentage of ARMs began to increase. However, we believe that the seasonal decline in home buying and continued affordability constraints will shape the purchase market.”

Other report highlights:

–Closing rates for all loans held steady at 71.1 percent for the second month, the highest percentage in 2018.

–The time to close all loans increased to 44 days in September, up from 43 days in August. Time to close a purchase loan held steady at 45 days, while time to close a refinance increased to 42 days in September, up from 38 the month prior.

–Overall FICO scores increased by 3 points to 727 in September. LTV held at 79 for the second month while DTI decreased to 25/39.