Refinance Share Edged Back Down in February as Mortgage Rates Stabilized

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The refinance share edged back down to 34% of all loans in February, down from 35% in January and down from 43% in February 2018, Ellie Mae’s Origination Insight Report shows.

The refinance share jumped in January due to a substantial decrease in mortgage rates. Rates then stabilized in February. The average rate for a 30-year fixed rate mortgage fell to 4.86%, down from 5.01% the previous month.

The average rate for a 30-year FHA loan decreased to 4.91% while the average rate for a conventional loan was 4.88%. The average rate for a Veterans Affairs loan was around 4.66%.

Average time to close also dropped in February, falling to 43 days for all loans. The average time to close a refinance decreased to 35 days, while the time to close a purchase dropped to 47 days.

The adjustable-rate mortgage (ARM) share of activity fell to 7.6%, down from 8.6% in January and down from a high of 9.2% in December. In February 2018, the ARM share was around 5.5%.

The closing rate for all loans in February was 75.5%, which is the highest its been in more than 16 months. The closing rate in January was 75.0% and in February 2018 it was 70.6%.

The closing rate for refinances increased to 70.8% while the closing rate for purchases increased to 78.2%.

The average FICO score for all loans was 726, up from 724 in January and up from 721 in February 2018. 

About 70% of all closed loans had FICO scores over 700. About 70% of purchase loans had FICO scores over 700 and about 68% of refinances had FICO scores over 700.

“Purchase percentages have increased following both the holiday season and the 30-year note rate decline,” says Jonathan Corr, president and CEO of Ellie Mae, in a statement. “We expect this increase to continue as we enter the busier spring buying season.”

The report is based on data collected from Ellie Mae’s Encompass loan origination platform.

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