Purchases increased to 62 percent of all closed loans, up from 59 percent in April according to the latest Origination Insight Report released by Ellie Mae. This is the first time that purchases have surpassed 60 percent of closed loans since August of 2015. Refinances represented 37 percent of closed loans in May, down from 40 percent in April.
The average time to close all loans increased to 45 days in May, up from 44 days in April. The time to close a purchase remained at 45 days in May, and the time to close a refinance remained at 44 days in May. Similarly, the average time to close FHA loans remained steady at 45 days in May. Time to close VA loans increased to 49 days in May, up from 48 days in April.
Closing rates for all loans increased to 70 percent in May, up from 69 percent in April. Refinance closing rates increased to 67 percent in May, up from 65 percent in April, while purchase closing rates increased to 75 percent in May, up from 73 percent in April.
Ellie Mae’s FICO distribution charts in the April Origination Insight Report showed that 69 percent of purchases and 69 percent of refinances had FICO scores of 700 or above. Thirty-one percent of purchases had a FICO score between 600 and 699, while only 27 percent of refinances had FICO scores between 600 and 699. Conventional loan FICO distribution showed 82 percent of scores above 700, while FHA FICO distribution showed only 39 percent of scores over 700 and 56 percent of scores between 600 and 699.
“Of the total loans closed in May, 62 percent were purchases and 37 percent represented refinances,” said Jonathan Corr, president and CEO of Ellie Mae. “This is up from April’s data, which showed that 59 percent were purchases while 40 percent were refinances. Additionally, the 30-year note rate dropped to 4.06 percent, its lowest point since May of 2015.”
The Origination Insight Report mines its application data from a robust sampling of approximately 75 percent of all mortgage applications that were initiated on the Encompass all-in-one mortgage management solution. Ellie Mae believes the Origination Insight Report is a strong proxy of the underwriting standards employed by lenders across the country.
The Origination Insight Report is a supplement to Ellie Mae’s monthly Millennial Tracker, which focuses on millennial mortgage applications during specific time periods. Ellie Mae defines millennials as applicants born between the years 1980 and 1999. The Millennial Tracker will continue to be released on the first Wednesday of each month.