The refinance share jumped to 43% in August as interest rates continued to dive, Ellie Mae’s Origination Insight Report shows.
That’s up from 38% in July and from 32% in August 2018.
The increase was driven by a significant drop in mortgage rates that came during the month. Ellie Mae’s data shows that the average rate for a 30-year fixed-rate mortgage fell to 4.07% in August, down from 4.18% in July.
The 30-year rate on conventional loans dropped to 4.11%, down from 4.20% in July, while the rate on FHA loans dropped to 4.11%, down from 4.27%.
The mortgage closing rate increased to 77.3% of all loans, up from 77.0% in July and upon from 71.7% in August 2018.
The average number of days to close a mortgage loan remained flat compared with July at 42 – which is where it has been since May. The time to close a refinance decreased to 39 days, while the time to close a purchase increased to 45 days.
The average FICO score on all closed loans increased to 734, up from 731 the month prior.
That’s the highest average FICO score for all closed loans in at least 16 months.
LTV decreased to 78, while DTI held at 24/37.
“Interest rates continue to decline and we’re seeing homeowners capitalize on the refinance opportunity throughout the month of August,” says Jonathan Corr, president and CEO of Ellie Mae. “As we enter the fall and the market expects further rate cuts from the Fed, we will watch to see if the share of refinances continues to climb further.”