The refinance share of mortgage activity increased to 45% in January, up from 40% in December, according to Ellie Mae’s Origination Insight Report.
The increase in refinance share was not due to an increase in refinances, but rather a dip in purchase volume that was in keeping with seasonal cycles.
“As we ring in 2018, we see refinances rise as a percent of overall loan volume – something that we have seen every January since we began reporting this data,” explains Jonathan Corr, president and CEO of Ellie Mae. “This increase in the percentage of refinances is attributed to [the] slower seasonal purchase market carrying over from the end of 2017. Our expectation is [the] percentage of refinances will taper back off to industry-projected levels of 25 to 30 percent in the coming months as the purchase market resumes its momentum.”
The average rate for a 30-year, fixed-rate mortgage was 4.33% in January, up from 4.28% in December.
The average number of days to close a mortgage remained flat at 44 days. The average to close a refinance decreased to 40 days while the average to close a purchase loan increased to 47 days.
The adjustable-rate mortgage share of all activity was about 5.5%.
The closing rate for all loans was about 70.9%, down from 71.2% the month prior. The closing rate for refinances decreased slightly to 65.5%, down from 65.6% in December. The closing rate on purchases decreased to 75.7%, down from 76.1%.
The average FICO score for all loans was 721, down from 722 in December. About 69% of all closed loans had FICO scores over 700. About 70% of purchase loans had FICO scores over 700. And about 66% of refinances had FICO scores over 700.
The average Federal Housing Administration purchase FICO score held steady at 680 in January. FHA refinance FICO scores held steady at 645. Conventional refinance FICO scores held steady at 730, and conventional purchase scores held steady at 751.
The report is based on loan data offloaded from Ellie Mae’s Encompass loan origination system.