The share of refinances continued to grow in August while purchase loans plunged under 60% for the first time this year.
Refinances made up 43% of originations in August, while the percentage of purchase loans dipped to 57%, according to the Ellie Mae Origination Insight Report. The 30-year note rate fell for the eight month in a row to 4.07% from 4.18% in August, pushing the share of refis up.
“Interest rates continue to decline and we’re seeing homeowners capitalize on the refinance opportunity throughout the month of August,” said Jonathan Corr, president and chief executive officer of Ellie Mae. “As we enter the fall and the market expects further rate cuts from the Fed, we will watch to see if the share of refinances continues to climb further.”
Closing rates on all loans also edged up to 77.3% from 77% in July. Closing rates on purchases rose to 80% from 79.3% the previous month, while rates on refinances inched down to 72.5% in August from 72.9% in July.
The time to close all loans remained unchanged at 42 days. The time to close a refinance loan dipped to 39 days from 40 days, while the time to close a purchase loan went up from 43 days to 45 days.
Lastly, the share of Adjustable Rate Mortgages (ARMs) dwindled to 5.3% last month from 5.7% in July.