March Origination Insight Report From Ellie Mae Shows Uptick in Home Purchase Percentage as Interest Rates Rise to Four-Year High

PLEASANTON, Calif.--()--The percentage of closed purchase loans increased to 62 percent of total closed loans, up five percent from the month prior according to the March Origination Insight Report from Ellie Mae® (NYSE:ELLI), the leading cloud-based platform provider for the mortgage finance industry. The percentage of closed refinances decreased to 38 percent, down from 43 percent the month prior.

This comes as 30-year interest rates continued to rise to 4.69 percent, up from 4.48 percent in February and 4.33 percent in January. This is the highest rate since January of 2014. Additionally, the percentage of Adjustable Rate Mortgages (ARMs) increased from 5.5 percent in February to 6.3 percent in March.

Closing rates on purchase loans rose to 76.3 percent, up from 75.7 percent the month prior, while closing rates on refinances decreased slightly from 65.0 percent in February to 64.9 percent in March.

“With interest rates rising to the highest levels since January 2014, we’re seeing the purchase market continue to gain momentum,” said Jonathan Corr, president and CEO of Ellie Mae. “As we’ve seen in the past several months, the shift to a purchase market coupled with the adoption of digital mortgage solutions by our customers aids in driving down the time to close.”

Other statistics of note in March included:

  • The percentage of refinances decreased across the board with FHA refinances dropping from 28 percent in February to 23 percent in March. Conventional refinances dropped from 48 percent in February to 43 percent in March, and VA refinances decreased from 33 percent in February to 28 percent in March.
  • The time to close all loans decreased slightly from 42 days in February to 41 days in March. Time to close purchases dropped to 43 days in March, down from 45 days in February and 47 days in January.
  • Overall FICO scores increased slightly to 722. LTV increased slightly to 79 and DTI decreased to 26/39.

The Origination Insight Report mines data from a robust sampling of approximately 80 percent of all mortgage applications that were initiated on the Encompass® all-in-one mortgage management solution. Ellie Mae believes the Origination Insight Report is a strong proxy of the underwriting standards employed by lenders across the country.

In addition to the Origination Insight Report, Ellie Mae also distributes data from its monthly Ellie Mae Millennial Tracker on the first Wednesday of each month. The Ellie Mae Millennial Tracker focuses on mortgage applications submitted by borrowers born between the years 1980 and 1999.

 

MONTHLY ORIGINATION OVERVIEW FOR MARCH 2018

    Mar. 2018*   Feb. 2018*  

6 Months
Ago
(Sept. 2017*)

 

1 Year Ago
(Mar. 2017*)

 

Closed Loans
Purpose
Refinance   38%   43%   38%   37%
Purchase   62%   56%   62%   63%
Type
FHA   20%   19%   20%   23%
Conventional   66%   67%   66%   63%
VA   10%   10%   10%   10%
Days to Close
All   41   42   43   43
Refinance   37   37   40   43
Purchase   43   45   44   43
Percentage of ARM and Fixed Loan Volume
ARM %   6.3%   5.5%   5.5%   5.6%
30-Year Rate
Average   4.690%   4.480%   4.210%   4.390%

*All references to months should be read as month ended.

 

PROFILES OF CLOSED LOANS FOR MARCH 2018

   

Closed First-Lien Loans
(All Types)

FICO Score (FICO)   722
Loan-to-Value (LTV)   79
Debt-to-Income (DTI)   26/39
 

More information and analysis of closed and denied loans by loan purpose and investor are available in the full report at http://www.elliemae.com/about-us/news-reports/ellie-mae-reports/.

To get a meaningful view of lender pull-through, Ellie Mae reviewed a sampling of loan applications initiated 90 days prior—or the December 2017 applications—to calculate an overall closing rate of 69.6 percent in March 2018 (see full report).

About the Ellie Mae Origination Insight Report

The Origination Insight Report focuses on loans that closed in a specific month and compares their characteristics to similar loans. The closing rate is calculated on a 90-day cycle rather than on a monthly basis because most loan applications typically take one-and-a-half to two months from application to closing. Loans that do not close could still be active applications or applications withdrawn by consumers or denied for incompleteness or non-qualification.

The Origination Insight Report details aggregated anonymized data pulled from Ellie Mae’s Encompass origination platform.

News organizations have the right to reuse this data, provided that Ellie Mae, Inc. is credited as the source.

About Ellie Mae

Ellie Mae (NYSE:ELLI) is the leading cloud-based platform provider for the mortgage finance industry. Ellie Mae’s technology solutions enable lenders to originate more loans, reduce origination costs, and reduce the time to close, all while ensuring the highest levels of compliance, quality and efficiency. Visit EllieMae.com or call (877) 355-4362 to learn more.

© 2018 Ellie Mae, Inc. Ellie Mae®, Encompass®, AllRegs®, Mavent®, Velocify®, the Ellie Mae logo and other trademarks or service marks of Ellie Mae, Inc. appearing herein are the property of Ellie Mae, Inc. or its subsidiaries. All rights reserved. Other company and product names may be trademarks or copyrights of their respective owners.

Contacts

Ellie Mae, Inc.
Erica Harvill, 925-227-5913
Erica.Harvill@elliemae.com
or
Allison+Partners
Alexandra Gardell Kreuter, 646-428-0618
EllieMae@allisonpr.com

Contacts

Ellie Mae, Inc.
Erica Harvill, 925-227-5913
Erica.Harvill@elliemae.com
or
Allison+Partners
Alexandra Gardell Kreuter, 646-428-0618
EllieMae@allisonpr.com