Purchase mortgage share stabilizes, but could resume climb
Purchase-loan share held steady month-to-month for the first time this year, even though it is still above year-ago levels in line with a seasonal decline, but growth remains in the forecast.
The share of closed purchase mortgages remained at 71% in July after a string of consecutive-month increases in the first half of the year, according to Ellie Mae's Origination Insight report. That's the highest purchase share recorded by Ellie Mae since it started tracking it in 2011.
Last July, purchases made up 65% of closed loans in the market. Purchase share during 2017 peaked at 68% in June, but Ellie Mae is forecasting more month-to-month increases in the second half this year.
"The purchase market remained solid in July and as we see inventories rise, we might begin to see a transition to a buyer's market," Jonathan Corr, president and CEO of Ellie Mae, said in a press release. "The summer home buying season is still in full swing and while interest rates have risen, we expect to see a continued increase in purchase percentages."
The lowest purchase share seen during both 2017 and this year was during the seasonally weak month of January. That share was 55% in 2018 and 53% last year.
The adjustable-rate mortgage share, which tends to rise as mortgage interest rates do, was up compared to last year at 6.6%, but a little lower than the previous month. A year ago in July, ARMs represented 5.7% of all closed loans and in June their share was 6.9%.