Closing rates for all loans increased to 72.2 percent in October, up 71.7 percent the prior month to the highest point in 2018, according to the latest Ellie Mae Origination Insight Report.
Closing rates on refinances during October increased to 64.9 percent, up slightly from 64.4 percent the month prior, Ellie Mae said. Closing rates on purchases held steady at 76.4 percent for the second consecutive month.
“As interest rates continue to rise, the percentage of adjustable rate mortgages (ARMs) is increasing as homebuyers are looking to take advantage of the best rates from their lenders,” Ellie Mae President and CEO Jonathan Corr said in a release. “Additionally, FICO scores remain the highest we’ve seen in 2018, indicating that lenders are not yet loosening credit availability to attract the shrinking refinance market. We’ll continue to watch this trend into the winter months.”
Ellie Mae said the time to close all loans increased to 45 days in October, up from 44 days in September. Time to close a purchase loan increased to 46 days, up from 45 days in September, while time to close a refinance increased to 43 days in October, up from 42 the month prior.
According to the report, the average 30-year interest rate for all loans increased to 5.01 percent, up from 4.91 percent in September and the highest in 2018. The percentage of ARMs increased to 8.2 percent in October, up from 7.2 percent in September.
During October, the percentage of purchase loans dropped to 68 percent of total loans from 71 percent the month prior. Refinances represented 32 percent of total loans in October.