While descending from spring's boom, September’s refinance share of mortgage activity inverted from a year ago.
Refinances accounted for 58% of closed loans last month, up annually from 49% and from 56% in August, according to Ellie Mae's Origination Insights Report.
Borrowers jumped at
"As we move into fall and the traditionally hot summer home-buying season normally tapers off, we will watch to see if purchase loan applications trend downward and refinances regain momentum," Joe Tyrrell,
The overall closing rate remained stable in September, edging down to 77.1% from 77.2% in August and 78.1% the year prior. That rate reached a report-high of 78.6% in November 2019. Similarly, the purchase loan closing rate declined to 80% from 80.1% month-over-month and 80.7% year-over-year. The refi closing rate decreased to 74.9% from August's 75.4% while inching up from September 2019's 74.8%.
Among users of Ellie Mae's loan origination system, the time to close increased to 51 from 49 days the month before and 43 days the year earlier.
The share of adjustable-rate mortgages decreased to 2.5% from 2.8% in August and 4.7% a year ago. Average FICO scores for loans closed continued climbing, ascending to 753 in September from 752 in August and 737 in September 2019.
"We're seeing FICO scores rise to new 2020 highs, approximately 20 points higher than the same period in 2019, indicating that lenders are being more selective, but also that homebuyers and homeowners should understand the various loan products available to find the one that suits their profile best," Tyrrell said.
