The share of mortgages closed in December that were refinances edged slightly higher according to new data from mortgage tech firm Ellie Mae.
Refinances took a 40% share, up from 39% in November 2017. FHA refinance loans accounted for 25%, also up 1 percentage point; conventional refinance loans were up 2 percentage points to 47%.
Two thirds of loans (66%) were conventional, 20% were FHA, and 10% were VAs.
“As we closed out 2017 we saw an increase in the percentage of refinances due to seasonality as fewer purchases take place in the fourth quarter, and likely homebuyers were taking advantage of the mortgage deductibility limit before it decreased to $750,000 on December 15th,” said Jonathan Corr, president and CEO of Ellie Mae.
Closing rates were up for all loan types: 71.2% in December compared to 70.9% in November. For refinance loans the closing rate increased from 65.1% to 65.6%; while for purchases it increased from 75.5% to 76.1%.
“We probably can also attribute some of the increase in closing rates to last-minute efforts by borrowers to close loans before the tax changes took effect,” added Corr.
The closing time for all loan types increased to 44 days from 43.
More market update: