Purchase share grows, closing times shrink ahead of spring market
The home purchase loan share is up and closing times are down ahead of an expected healthy spring buying season, according to Ellie Mae's Origination Insight Report.
The 30-year note rate fell to 4.86% from 5.01% between January and February, and while the decline didn't boost the refinance share, it increased consumer interest in the market and pushed up the percentage of applications that turned into closed purchase loans to 66%; this is up from 55% a year ago and from 65% from the previous month.
Though it decreased, the refinance share didn't move much from January, dipping only 1 percentage point to 34%. It did, however, drop more substantially from a year ago, when it was 45%, but the 30-year note rate was only 4.48% at that time.
"Purchase percentages have increased following both the holiday season and the 30-year note rate decline," said Jonathan Corr, president and CEO of Ellie Mae, in a press release. "We expect this increase to continue as we enter the busier spring buying season."
Overall loan closing times dropped by two days to 43 between January and February. By loan type, closing times for refinance loans declined to 35 days from 40 year-over-year and from 38 days month-over-month; purchase loan closing times held steady at 47 days from a year ago but declined from 49 in January.
Mortgage loan closing rates grew to 75.5% in February from 70.6% during the same period last year, and inched up from 75% in January. Closing rates for refinance loans increased to 70.8% from 65% year-over-year, while closing rates for purchase loans rose to 78.2% from 75.7% over that same period.