Refinances in April dropped to the lowest share of total origination volume since June 2017, while adjustable-rate mortgages (ARMs) increased to the highest share since June 2014, according to Ellie Mae’s Origination Insight report, which is based on origination data voluntarily provided by mortgage lenders using the software firm’s Encompass loan origination system.
Refinances represented 34% of total origination volume, according to the report, down from 38% in March and down from 35% in April 2017.
The major contributor to shrinking refinance volume was, of course, rising interest rates. In April, the average rate for a 30-year fixed-rate mortgage hit the highest point since Ellie Mae began tracking data in 2011, at 4.79%. That’s up from 4.69% in March and up from 4.41% in April 2017.
The average number of days to close a mortgage loan (all loan types) was 41, the same as March but down from 42 days in April 2017. What’s more, it’s down from 51 days in January 2017, when many lenders were still adjusting to the new TILA-RESPA integrated disclosures (TRID) rule.
In a statement, Jonathan Corr, president and CEO of Ellie Mae, says he expects to see lenders’ average time to close continue to decrease as they leverage digital mortgage solutions and, as a result, gain improved efficiency.
The average FICO score for all closed loans in April was 723. It has ranged between 721 and 724 since January 2017, according to the report.
The average closing rate was 69.5%, down slightly from 69.6% in March but up slightly from 69.4% in April 2017.