Ellie Mae's Origination Insight Report for October shows the mortgage industry's ongoing shift from a refinance market to a purchase market.
About 51.4% of all loans that were initiated 90 days prior to Oct. 1 closed in October, down from 52.3% in September. It took an average of about 46 days to close a purchase loan deal.
Purchase loans represented 61% of the market, while refinancings represented 39%. In September, purchase loans represented 58% of the market, while refinancings represented 42%.
"In October 2013, the share of purchase loans climbed to 61 percent – the highest since we began tracking in August 2011," says Jonathan Corr, president and chief operating officer of Ellie Mae, in a statement. "In October 2012, purchase loans represented only 31 percent of closed loans. This has been the ninth consecutive month that the purchase loan percentage has either increased or stayed steady.
"The average FICO scores for closed loans last month remained at 732, but this was significantly lower than the average of 750 in October 2012," adds Corr. "Similarly, debt-to-income ratios rose for the fourth month in a row, from 25/37 in September 2013 to 25/38 in October 2013.
"Home Affordable Refinance Program-related refinancing activity cooled significantly with conventional refinances at 95%-plus loan-to-value dropping nearly in half: from 13.4% in August 2013 and 10.3% in September 2013 to 7.3% in October 2013," Corr concludes.
The report draws its data from originations that flow through Ellie Mae's Encompass360 loan origination platform and the Ellie Mae Network – representing roughly 20% of all originations nationwide.
To download the full report, click here.
