The refinance share of mortgage origination volume increased to 49% of all closed loans in September, up significantly from 43% in August and 29% in September 2018, according to Ellie Mae’s Origination Insight Report.
Driving the increase in refinance activity, of course, was falling mortgage rates: The average rate for a 30-year fixed-rate mortgage in September was 3.93%, down from 4.07% in August.
Freddie Mac notes that September was the first month in 2019 that conventional refinances increased to more than 50% of total conventional loans, accounting for 55% of conventional loans in the month.
FHA refinances accounted for 28% of all FHA loans, up from 27% the month prior. VA refinances increased to 37%, up from 34% the month prior.
The average time to close a mortgage (all types) increased to 43 days from 42 days in August.
The average time to close a refinance held at 39 days, while the average time to close a purchase loan increased to 46 days, according to the monthly report.
The ARM share continued to fall: It was around 4.7% in September, down from 5.3% in August.
The closing rate increased to a new recent high of 78.1%, up from 77.3% in August and up from 71.7% in September 2018.
The average FICO score for all closed loans also hit a new recent high at 737, up from 734 in August and up from 727 in September 2018.
LTV decreased to 77 while DTI held at 24/37.
“The continued decline in interest rates is driving the refinance revitalization that is now accounting for almost 50 percent of all closed loans in the month,” says Jonathan Corr, president and CEO of Ellie Mae, in a statement “The market is still anticipating further rate cuts by Treasury, so lenders should capitalize on leveraging technology to ensure they are responding to the growing number of refinance opportunities that come their way.”