Purchase loans held on to the June share of 71 percent of closed loans in July which remains the highest share in the seven-year history of Ellie Mae's Origination Insight Report. Refinances also held steady, remaining at 29 percent although the percentage of refinancing through the VA gained 2 percentage points to 25 percent. Conventional and FHA stayed at 31 and 19 percent respectively.  

The distribution of new loans remained the same as in June as well, with 66 percent of originations going to conventional loans, 20 percent FHA, and VA loans accounting for 10 percent.  The share of Adjustable Rate Mortgages (ARMs) dropped to 6.6 percent from 6.9 percent the previous month.

"The purchase market remained solid in July and as we see inventories rise, we might begin to see a transition to a buyer's market," said Jonathan Corr, president and CEO of Ellie Mae. "The summer home buying season is still in full swing and while interest rates have risen, we expect to see a continued increase in purchase percentages."

The time to close all loans rose one day to 43 days in July with the refinance timeline increasing by four days compared to June to 41 days. All three loan types saw refinancing times grow by three or four days. The time to close purchases held at 44 days for the second month.

The closing rate for all loans increased from 70.5 percent to 70.9 percent with all of the gain coming from refinancing pull-throughs. While the closing rate for purchases increased slightly for both conventional and FHA originations, it fell by more than 3.5 points for VA purchases to a 74.8 percent rate.  Ellie Mae computes closing rate by reviewing a sampling of loan applications initiated 90 days prior, in this case March 2018 applications.

Overall FICO scores decreased by one point in July to 725. Average loan-to-value ratios remained at 80 and the debt-to-income measure was stable at 26/39.

The Origination Insight Report mines data from a large sample of approximately 80 percent of all mortgage applications that were initiated on Ellie Mae's mortgage management software.  The company says its report is a strong proxy of the underwriting standards employed by lenders across the country.