June Closing Rates Highest in 8 Years
Source: MortgageNewsDaily by Jann Swanson
Closing rates for mortgage loans were at the highest level in June since Ellie Mae began collecting the data in 2011. The company, in its June Origination Insight Report, said 76.8 percent of all loans closed, up from a rate of 75.6 percent the previous month. Closing rates on purchase loans hit 78.8 percent while the rate for refinances was 73.4 percent. Ellie Mae basis closing rates on applications submitted 90 days earlier, in this case in March.
The rate for 30-year mortgages originated during June dropped to 4.40 percent from 4.52 percent in May, the sixth consecutive month that rates declined. The 30-year note rate for FHA loans decreased to 4.49 percent from 4.63 percent and the 30-year Conventional rate and VA rate each fell 11 basis points to 4.41 percent and 4.20 percent respectively.
Conventional loans accounted for 68 percent of originations compared to 66 percent in May. FHA loans dipped to an 18 percent share from 19 percent and the VA maintained a 10 percent share. Refinance loans made up 31 percent of the total, one percentage point less than in May, and the share of Adjustable Rate Mortgages (ARMs) decreased to 6.3 percent from 6.7 percent.
"As the 30-year note rate continues to decline, we are seeing robust purchase and refinance activity," said Jonathan Corr, President and CEO of Ellie Mae. "Closing rates have hit the highest percentage since we began tracking data in 2011 and even with heavy summer activity, Ellie Mae's customers are still seeing their times to close loans remain well below the industry average."
The Origination Insight Report mines data from a sample of approximately 80 percent of all mortgage loans that were initiated on Ellie Mae's mortgage management system. The company says its report is a strong proxy of the underwriting standards employed by lenders across the country.