According to the latest Origination Insight Report from ICE Mortgage Technology, interest rates continued to decline and fell below three percent in November, with the 30-year note rate reaching 2.97 percent, one percent lower than the same time in 2019.
The 30-year note rate for FHA and conventional loans dropped below the three percent mark for the first time to 2.99 percent, and the note rate on VA loans continued to decrease, hitting 2.72 percent for November.
Refinances continued to rise, reaching 61 percent of total closed loans in the month, up one point from the month prior. In November 2019, refinances accounted for 49 percent of total closed loans – a significant year-over-year difference.
Purchase loans dropped to 39 percent of all closed loans in the month, down one point from the prior month. Conventional loans held at 82 percent of all closed loans for the second straight month.
Other statistics of note in November included:
- The time to close all loans increased to 55 days in November, up from 54 days in October.
- Time to close for purchase loans increased to 49 days in November, up from 48 days in October.
- Time to close for refinances increased to 59 days in November, up from 57 days in October.
- The average FICO score for all loans decreased slightly to 752.
- Closing rates decreased slightly to 75.6 in November, down from 76.7 in October.
“As we near the conclusion of 2020, we are still seeing a robust appetite for refinances, accounting for the lion’s share of closed loans in the month. Interest rates continue to fall below three percent, driving demand for both purchases and refinances as homebuyers stretch their spending potential or take advantage of the opportunity to reduce their monthly mortgage payment,” says Joe Tyrrell, president, ICE Mortgage Technology.
“With many parts of the country entering the next phase of pandemic-related shutdowns, lenders will need to take advantage of technology to enable virtual capabilities for their employees and homebuyers and provide automated workflows to simplify processes and improve engagement with interested parties.”