The downturn in interest rates continues to boost the share of refinances to almost half of all loans in September.
Ellie Mae’s September Origination Insight Report showed that the 30-year note rate fell for the ninth month in a row to 3.93%. The interest rate was down from 4.07% in August.
Refinances accounted for 49% of all loans in September, up from 43% the month before. Meanwhile, the percentage of purchase loans was down to 51%, the lowest since March 2015.
“The continued decline in interest rates is driving the refinance revitalization that is now accounting for almost 50% of all closed loans in the month,” said Jonathan Corr, president and chief executive officer of Ellie Mae.
For the first month this year, conventional refinances increased to over 55% of total conventional loans in September. Conventional purchases, on the other hand, decreased to 45%.
FHA refinances edged up one basis point from 27% in August to 28% in September, while FHA purchases fell to 72%. VA refinances were 37%, up from 34% the month prior.
“The market is still anticipating further rate cuts by Treasury, so lenders should capitalize on leveraging technology to ensure they are responding to the growing number of refinance opportunities that come their way,” Corr said.
The average time to close all loans climbed to 43 days from 42 days; up to 46 days for purchases and holding steady at 39 days for refinances.
The share of adjustable-rate mortgages dwindled to 4.7% in September from 5.3% in August, while the average FICO scores increased to 737 from 734 the month before.