January saw a boost in closing rates due to low interest rates and moderated refinances.
Ellie Mae’s January Origination Insight Report showed that interest rates edged down from 3.99% to 3.96% month over month. Refinances held steady, making up 46% of total closed loans.
These drove a slight increase in closing rates on all loans, up from 77.8% in December to 78.2% in January.
Conventional loan refinances rose from 53% to 55% month over month. Both VA and FHA refinances dropped one percentage point from December to 8% and 16%, respectively. Closing rates on purchases were 80.7%, while rates on refinances were 75.8%.
The time to close all loans remained unchanged for the second month at 48 days in January. FICO scores on all closed loans inched up from 735 to 738.
"All indicators show that we will continue to see a healthy housing market in 2020 as more millennials look to purchase homes and interest rates remain at historic lows driving refinance activity," said Jonathan Corr, president and CEO of Ellie Mae. "We do expect 2020 to bring some challenges for homebuyers, not because of what they can afford but rather what they can find due to lagging inventory."