June Ellie Mae Origination Insight Report Data Shows Purchase Market Rebounding As Interest Rates Continue To Decline

Interest rates on all closed loans continued to decline in June to 3.40 percent, down from 3.43 percent in May, according to the latest Origination Insight Report from Ellie Mae®, the leading cloud-based loan origination platform provider for the mortgage industry.

The 30-year rate on conventional loans fell again, dropping to 3.42 percent, down from 3.44 percent in May. Similarly, the 30-year rate on FHA loans fell to 3.41 percent in June, down from 3.45 percent in May. The 30-year rate on VA loans dropped to 3.20 percent in June, down from 3.24 percent in May.

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The purchase market began to rebound in June, accounting for 42 percent of all closed loans in the month, up from 35 percent the month prior. Refinances accounted for the remaining 58 percent of closed loans, down from 65 percent in May.

Other statistics of note in June included:

  • The time to close all loans increased to 47 days, up from 45 the month prior. Time to close for purchase loans decreased to 46 days, down from 47 the month prior, while time to close refinances increased to 48 days, up from 44 days the month prior.
  • FICO scores on all loans increased to 751 in June, up from 750 in May. FICO scores also increased month-over-month for both purchase and refinances across Conventional, FHA and VA loans.
  • Closing rates dropped to 73.4% in June, down from 76.0% in May.

“Interest rates decreased for the sixth consecutive month and we’re seeing a rebound in the purchase market which now represents 42 percent of all closed loans, a seven percent increase from May,” said Jonathan Corr, President and CEO of Ellie Mae. “Homebuyers are taking advantage of these historically low rates to both buy and refinance but it does appear that lenders are looking for borrowers with better credit across all mortgage products as FICO scores have continued to increase across the board since March.”

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.

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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.

MONTHLY ORIGINATION OVERVIEW FOR JUNE 2020

June 2020*

May 2020*

6 Months
Ago

(Dec. 2019*)

1 Year Ago

(June 2019*)

Closed Loans

Purpose

Refinance

58%

65%

46%

31%

Purchase

42%

35%

54%

69%

Type

FHA

10%

9%

17%

18%

Conventional

80%

82%

70%

68%

VA

7%

6%

9%

10%

Days to Close

All

47

45

48

42

Refinance

48

44

45

38

Purchase

46

47

51

45

Percentage of ARM and Fixed Loan Volume

ARM %

3.5%

3.8%

5.5%

6.3%

30-Year Rate

Average

3.40%

3.43%

3.99%

4.40%

*All references to months should be read as month ended.

PROFILES OF CLOSED LOANS FOR JUNE 2020

Closed First-Lien Loans
(All Types)

FICO Score (FICO)

751

Loan-to-Value (LTV)

73

Debt-to-Income (DTI)

23/35

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