Ellie Mae: January Refis Hold Steady; Closing Rates Increase
A slight drop in interest rates in January stabilized refinance activity and improved closing rates, said Ellie Mae, Pleasanton, Calif.
Refinances accounted for 46 percent of total closed loans in January, on par with December numbers, Ellie Mae said in its monthly Origination Insight report. Conventional loan refinances increased from 53 percent in December to 55 percent in January, while VA and FHA refinances declined slightly from the month prior.
The report said closing rates on all loans increased to 78.2 percent in January, up from 77.8 percent the month. prior. Closing rates on purchases was 80.7 percent and closing rates on refinances was 75.8 percent. Time to close all loans held for the second month at 48 days. Time to close on refinances and purchases was also 48 days in January.
Ellie Mae said FICO scores on all closed loans increased slightly from 735 in December to 738 in January.
“The start to 2020 saw interest rates decline and refinances hold steady, driving an increase in our closing rate,” said Jonathan Corr, President and CEO of Ellie Mae. “All indicators show that we will continue to see a healthy housing market in 2020 as more millennials look to purchase homes and interest rates remain at historic lows driving refinance activity. We do expect 2020 to bring some challenges for homebuyers, not because of what they can afford but rather what they can find due to lagging inventory.”