Ellie Mae: Refi Market Steady as Interest Rates Continue to Drop
Interest rates hit record lows last week—but they were already low in May, said Ellie Mae, Pleasanton, Calif., resulting in steady refinancing volume.
The Ellie Mae monthly Origination Insight report said the average interest rate on all closed loans fell to to 3.43 percent in May, down from 3.48 percent in April. The 30-year rate on conventional loans fell again, dropping to 3.44 percent, down from 3.48 percent in April. Similarly, the 30-year rate on FHA loans fell to 3.45 percent in May, down from 3.56 percent in April. The 30-year rate on VA loans dropped to 3.24 percent in May, down from 3.31 percent in April.
The report said as rates dropped, the percentage of refinances held steady at 65 percent of closed loans in May.
“As we enter the summer months that typically bring a busier purchase market, we will watch to see if the numbers shift further as homebuyers continue to take advantage of low rates and a loosening of inventory after a tight March and April driven by the shelter in place,” said Ellie Mae President and CEO Jonathan Corr.
Other report findings:
–Time to close all loans increased to 45 days in May, up from 42 days in April.
–FICO scores on all loans increased to 750 in May, up from 749 in April driven by conventional refinances.
–Closing rates dropped to 76% down from 76.5% in April and 78% in March.