Ellie Mae: Low Rates Drive September Refi Rate

Ellie Mae, Pleasanton, Calif., released its monthly Origination Insight Report, showing falling interest rates drove the refinancing rate for closed rates to nearly 50 percent.

The report said the 30-year note rate dropping for the ninth consecutive month to 3.93 percent, down from 4.07 percent in August, drove up the percentage of refinances, which accounted for 49 percent of all loans in September, up from 43 percent the month prior. Purchase percentages as a share of all loans dropped to 51 percent of all total loans, the lowest percentage since March of 2015. 

Ellie Mae said September marked the first month in 2019 in which conventional refinances rose to more than 50 percent of total conventional loans, accounting for 55 percent of conventional loans in the month. Conventional purchases dropped to 45 percent. FHA refinances increased slightly to 28 percent of all closed FHA loans, up from 27 percent the month prior, while FHA purchases dropped to 72 percent. VA refinances increased to 37 percent, up from 34 percent the month prior.

“The continued decline in interest rates is driving the refinance revitalization that is now accounting for almost 50 percent of all closed loans in the month,” said Ellie Mae President and CEO Jonathan Corr. “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.”

Other report findings:

–Time to close all loans rose slightly to 43 days, up from 42 days in August. The time to close a refinance loan held at 39 days while the time to close a purchase loan increased to 46 days in September, up from 45 from August.

–The percentage of adjustable-rate mortgages decreased to 4.7 percent, down from 5.3 percent the month prior.

–The average FICO score for all closed loans increased to 737, up from 734 the month prior.