According to Ellie Mae’s Origination Insight Report for January, home refinances stabilized, accounting for 46% of total closed loans in the month, which was on par with December’s numbers.
Conventional loan refinances increased from 53% in December to 55% in January, while VA and FHA refinances declined slightly from the month prior.
During that time, interest rates fell slightly, from 3.99% in December to 3.96% in January.
“The start to 2020 saw interest rates decline and refinances hold steady, driving an increase in our closing rate to 78.2 percent in January,” says Jonathan Corr, president and CEO of Ellie Mae.
“All indicators show that we will continue to see a healthy housing market in 2020, as more millennials look to purchase homes and interest rates remain at historic lows driving refinance activity,” he adds. “We do expect 2020 to bring some challenges for home buyers, not because of what they can afford but rather what they can find, due to lagging inventory.”
The time to close all loans held for the second straight month at 48 days. Time to close on refinances and purchases was also 48 days in January.
Closing rates on all loans increased to 78.2% in January, up from 77.8% the month prior. Closing rates on purchases was 80.7%, and closing rates on refinances was 75.8%.
FICO scores on all closed loans increased slightly, from 735 in December to 738 in January.