As interest rates declined in February, the share of refinances increased by 2 percent, according to Ellie’s Mae’s February Origination Insight Report.
The 30-year rate on all loans in February dropped to 3.86 percent, down from 3.96 percent the month prior, according to the report. The 30-year rate on conventional loans fell below 4 percent for the first time since October 2019, dropping to 3.89 percent from 4.03 percent in January.
As rates dropped, refinances increased, representing 48 percent of all closed loans in the month, up from 46 percent the month prior. Purchase loans still continued to make up the majority of the market, representing 52 percent of closed loans in February.
“Interest rates continued to decline into February which we believe is causing us to see a small refinance rebound,” Ellie Mae President and CEO Jonathan Corr said in a release. “We will wait to see what the impacts of global factors, like stock market declines and the coronavirus, have on the housing market as we enter the spring.
“We continue to see our lenders consistently lowering their time to close and closing more loans as they leverage digital mortgage technology across more aspects of the loan origination workflow,” Corr said.
During February, the time to close all loans declined to 43 days, down from 48 days in January, the report found. Additionally, closing rates on all loans increased to 78.3 percent in February, up from 77.2 percent the month prior. Closing rates on purchases held at 80.7 percent and closing rates on refinances increased to 76.0 percent, up from 75.8 percent the month prior.
Ellie Mae said FICO scores on all closed loans held steady at 738 for the second month.