After increasing to 32% in August, the refinance share of mortgage originations fell back to 29% in September – which is where it was in July and June – according to Ellie Mae’s Origination Insight Report.
That’s down from 38% in September 2017.
The refinance share has been plummeting steadily since the first quarter of this year, as mortgage interest rates have increased.
Interestingly, however, the average rate for a 30-year fixed-rate mortgage in September actually decreased relative to August – to 4.91%, down from a high of 4.92% in August.
The adjustable rate mortgage (ARM) share of mortgage activity increased to 7.2% of all loans in September, up from 6.6% the month prior.
The average number of days to close a mortgage increased slightly to 44 days – up from 43 in August.
The closing rate in September was 71.7%, flat when compared with August.
The average FICO score for all closed loans was 727, up from 724 the previous month.
Average LTV remained at 79 for the second consecutive month. Average DTI was 25/39, down from 26/39 in August.
“We see refinances remain at a low percentage of aggregate closed loans and purchase inventory continues to be tight as we move into the fall,” says Jonathan Corr, president and CEO of Ellie Mae, in a statement. “We did see the first reduction in interest rates this month and with that, the percentage of ARMs began to increase. However, we believe that the seasonal decline in home buying and continued affordability constraints will shape the purchase market.”
The report is based on closing data from Ellie Mae’s Encompass loan origination system.