Refinancing accounted for 35 percent of all mortgages originated in August, unchanged from July, but down from 47 percent at the beginning of the year. Ellie Mae's says, in its Origination Insight Report for the month, that refinancing is holding up especially well among conventional loans where the share ticked up 2 percentage points from July to 42 percent of all loans.
"As the summer season draws to a close, refinances held steady at 35 percent of all closed loans coupled with a slight increase in interest rates to 4.27, up from the 2017 low of 4.25 in July," said Jonathan Corr, president and CEO of Ellie Mae.
The share of loans claimed by each product type was unchanged from both June and July. Conventional loans made up 64 percent, FHA 22 percent, and VA 10 percent.
The time to close a refinance declined from 42 to 41 days while a purchase loan remained on a 43-day timeline. The overall closing time was shortened one day to 42 days.
The closing rate for all loans climbed to 71.7 percent from 70.6 percent in July, making it the best rate since January. The refi closing rate ticked up 1.5 point to 63.4 percent and purchase closings rose from 76.2 to 76.8 percent. Closing rates were up across all loan types. Ellie Mae calculates its closing rate from a sampling of loan applications initiated 90 days earlier; in this case, the May crop.
The average FICO score on all closed loans remained steady at 724 in August, but there were changes within loan types. The average FICO scores for FHA refinances increased three points to 649 while the score for conventional purchase loans decreased 1 point to 752 and VA refinances averaged 702, up from 700 in July.
The Origination Insight Report mines data from a sampling of approximately 80 percent of all mortgage applications that were initiated on the Ellie Mae's mortgage management system. The company says its report provides a strong proxy of the underwriting standards employed by lenders across the country.