According to the December Origination Insight Report from Ellie Mae, the leading cloud-based platform provider for the mortgage finance industry, interest rates rose again in December to 3.99 percent, up from 3.97 percent in November and the 2019 low of 3.93 percent in September.
This is coupled with the increase in purchase loans, accounting for 54 percent of total closed loans in the month. This is up from 51 percent in November and the 2019 low of 49 percent in September. June of 2019 saw the highest percentage of purchase loans at 69 percent of total closed loans.
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Other statistics of note in December included:
- The time to close all loans rose to 48 days in December, up from 45 days the month prior. Time to close a purchase increased to the highest point in 2019 at 51 days while time to close a refinance increased to 45 days, up from 43 days in November.
- Time to refinance has been steadily increasing since April when it stood at 33 days along with the increase in demand.
- Closing rates on all loans decreased slightly from the 2019 high in November to 77.8 percent in December. Closing rates on refinances dropped to 75.5 percent in December, down from 77.1 percent the month prior while closing rates on purchases dropped to 80.3 percent, down from 80.6 percent the month prior.
“As we closed out 2019, we saw interest rates continue to rise to 3.99 percent, still well below the 2019 high of 5.01 percent in January. This drove the increase in purchase percentages back up to 54 percent of closed loans, still well below the 2019 high of 69 percent in June,” said Jonathan Corr, President and CEO of Ellie Mae. “While we believe that seasonality played a part in the slowing of refinances, we believe that we will continue to see purchase percentages pick up in 2020 as refinance demand normalizes.”
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The Origination Insight Report mines data from a robust sampling of approximately 80 percent of all mortgage applications that were initiated on the Encompass all-in-one mortgage management solution. Ellie Mae believes the Origination Insight Report is a strong proxy of the underwriting standards employed by lenders across the country.
In addition to the Origination Insight Report, Ellie Mae also distributes data from its monthly Ellie Mae Millennial Tracker on the first Wednesday of each month. The Ellie Mae Millennial Tracker focuses on mortgage applications submitted by borrowers born between the years 1980 and 1999.
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