The recent increase in fixed mortgage rates had the effect of driving more borrowers into adjustable rate mortgages (ARMs) in November, Ellie Mae’s Origination Insight Report shows.
The average rate for a 30-year fixed-rate mortgage, based on closings, was 5.15% in November, up from 5.01% in October, according to the report, which uses data from Ellie Mae’s Encompass loan origination system.
As a result, the ARM share of mortgage activity increased to 8.9% – the highest level since Ellie Mae began tracking data in 2011.
The average time it takes to close a mortgage loan increased to 46 days in November, up from 45 days in October to reach the highest level in more than 16 months.
The average time to close a refinance held at steady 43 days while the average time to close a purchase jumped to 48 days, according to the report.
Meanwhile, the refinance share of mortgage activity decreased to 30% of all loans, down from 32% in October and down from 40% in December 2017.
The decrease in refinance share, of course, was also due to rising rates.
“As interest rates continue to rise, we are seeing the percentage of adjustable rate mortgages rise in lockstep, and this month they’ve risen to the highest percentage we’ve seen since we began tracking data,” says Jonathan Corr, president and CEO of Ellie Mae, in a statement. “As expected, we are also continuing to see the percentage of refinances remain low – 30 percent in November – due to higher interest rates.”
The average FICO score for all loan types was 727, flat when compared with October and September but up from 722 in November 2017.