Ellie Mae: Super-Low Rates Lead to ‘Revival in Refinances’


According to the latest Origination Insight Report from Ellie Mae, interest rates dropped to new historic lows in September, hovering at 3% on all loans, representing the lowest rate since Ellie Mae began tracking this data in 2011, and down from 3.09% the month prior.

In fact, the 30-year note rate for VA loans dropped to 2.78 percent, down from 2.86 in August, putting it well below the 3.00 percent mark. Similarly, the 30-year rate on FHA loans fell to 3.01 percent, down from 3.10 percent the month prior. Conventional rates remained the highest overall, at 3.02 percent – still down considerably from 3.12 percent the month prior.

The rate decreases coincide with the revival in refinances, as they ticked back up to 58 percent in September, returning to their pre-summer percentages.

Purchase loans dipped back to 42 percent of all closed loans in the month, and while this is a significant drop from 50 percent in January, it is well above the May low of 35 percent of all closed loans.

In September, the time to close all loans increased to 51 days, up from 49 days in August. Time to close for purchase loans increased to 47 days in September, up from 45 days a month earlier. Time to close for refinances increased to 54 days, up from 50 days in August.

The FICO score average for all loans continued to increase to a new 2020 high, rising to 753 in September, up one point from the prior month.

Closing rates decreased slightly, to 77.1 percent, down from 77.2 percent in August.

“As we move into fall and the traditionally hot summer home-buying season normally tapers off, we will watch to see if purchase loan applications trend downward and refinances regain momentum,” says Joe Tyrrell, president of Ellie Mae/ICE Mortgage Technology. “We know that homeowners are continuing to take advantage of the low rates – almost an entire percentage point lower than the same period in 2019 – as a means to lower monthly payments and stretch their dollar.”

For more information, the full report is available here.

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