Refinances surged in March as a result of the actions taken by the federal government, which slashed interest rates to support the economy during the coronavirus crisis.
The 30-year rate on all loans fell from 3.86% to 3.65% in March, according to Ellie Mae's latest Origination Insight Report.
The 30-year rate on conventional loans also fell, declining from 3.89% to 3.65% month over month. Similarly, the 30-year rate on FHA loans dropped to 3.76% from 3.87% the month before, while the rate on VA loans went down from 3.62% to 3.45%.
"Interest rates continued to decline into March, driving the growing share of refinances for another month," said Jonathan Corr, president and CEO of Ellie Mae. "Despite the impacts of the coronavirus and stock market fluctuations, our lenders are leveraging technology to manage borrower demand for refinances while taking into account the health and safety of all players in the mortgage origination process."
As rates dipped, the share of refinances grew, representing 55% of all closed loans in March. In February, refinances made up 51% of closed loans and 50% in January.
Meanwhile, the share of adjustable-rate mortgages shrank from 5.3% to 3.2% month over month.
There was also a decrease in closing rates on all loans, down from 78.3% to 78%. Closing rates on purchases dipping slightly to 80.2% (from 80.7%) and closing rates on refinances down to 75.7% (from 76%).
The time to close all loans dwindled from 43 days in February to 40 days in March.
"With digital solutions for homebuyers and originators like online applications, remote online notarizations, homeowner-guided appraisals, and eClosings, our lenders are able to minimize disruptions to their operations and limit in-person interaction," Corr said.