Refinancing stabilizes as interest rates continue to spiral down
Purchase originations edged higher in July as interest rates continue to decrease, according to the latest Origination Insight Report from Ellie Mae.
Home purchases comprised 46% of all closed loans in July, up from 42% in June. Refinances still represented the majority of closed loans at 54%, down from 58% from June.
The 30-year rate on all loans fell further last month, down 16 basis points to 3.24% month over month. The 30-year rate on both conventional and FHA loans dropped to 3.26% (from 3.42%), while the rate for VA loans dwindled to 3.02% (from 3.20%).
The time to close all loans remained unchanged at 47 days for the second month in a row, with purchase loans down to 44 days (from 46 days) while time to close refinances increased to 50 days (from 48 days).
FICO scores for refinances across conventional, FHA, and VA loans grew higher in July. Closing rates rose to 77.1% from 73.4% the month prior.
"Interest rates have continued to decrease, down to 3.24% in July. If we look at this month versus the same time in 2019, interest rates are down close to a full percentage point, giving new home buyers the opportunity to stretch their dollar as they purchase and existing homebuyers the ability to reduce monthly costs," said Jonathan Corr, president and CEO of Ellie Mae. "We're also seeing an increase in closing rates for Ellie Mae lenders highlighting the value of mortgage technology as they contend with significant volume, remote workforces and homebuyers looking to complete the process completely online."