Percentage of Home Purchases Increases in December According to Latest Origination Insight Report from Ellie Mae
January 18 2017 - 9:00AM
Business Wire
Time to close increases slightly; closing
rates increase for purchases and refinances
As the 30-year note rate started to rise, home loan purchase
percentages began to increase slightly in December, rising to 54
percent of all closed loans, up from 53 percent in November. This
likely signals an upward trend that will continue throughout 2017
according to the latest Origination Insight Report released by
Ellie Mae® (NYSE:ELLI), a leading provider of innovative on-demand
software solutions and services for the residential mortgage
industry. Refinances represented 46 percent of closed loans in the
month, down from 47 percent the month prior. This shift is likely
due to rising rates as the 30-year note rate in December was 4.05,
up from 3.81 in November.
Closing rates for all loans increased to 73.2 percent in
December, the highest rate in 2016. Refinance closing rates
increased to 69.6 percent, up from 68.7 percent the month prior,
and purchase closing rates increased to 77 percent, up from 76.1
percent in November.
The average time to close all loans increased to 50 days in
December, up from 49 days the month prior, likely due to holiday
seasonality as well as efforts to close loans before rates continue
on their upward track. Similarly, time to close a refinance
increased to 52 days and time to close a purchase increased to 48
days, both up one day from November.
Average FICO scores decreased slightly in December to 726, down
from 728 the month prior. Conventional purchase FICO scores stayed
steady at 753 for the third month while conventional refinance FICO
scores tapered off to 739, down from 743 in November. FHA purchase
FICO scores remained at 686 while FHA refinance FICO scores
increased one point from 654 in November to 655 in December. VA
purchase FICO scores dropped to 707, down from 709 in November, and
VA refinance FICO scores dropped one point to 709 in December.
“As rates began to increase we saw purchases tick back up in
December, signaling the start of a trend we expect to continue into
2017,” said Jonathan Corr, president and CEO of Ellie Mae. “We also
saw closing rates rise to the highest percentage in 2016 as
homebuyers locked in rates and lenders closed loans before the
conclusion of the year.”
The Origination Insight Report mines its application data from a
robust sampling of approximately 75 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.
Ellie Mae also distributes its monthly Ellie Mae Millennial
Tracker, which focuses on mortgage applications submitted by
millennials during specific time periods. Ellie Mae defines
millennials as applicants born between the years 1980 and 1999. The
Millennial Tracker will continue to be released on the first
Wednesday of each month.
Other findings from the December report:
- Time to close a VA loan held at 52
days.
- The Debt-to-Income (DTI) ratio for all
closed loans was 25/38, and the Loan-to-Value (LTV) ratio remained
at 78.
MONTHLY ORIGINATION OVERVIEW FOR DECEMBER 2016
Dec. 2016* Nov. 2016*
6 Months Ago 1 Year Ago
(Jun. 2016*) (Dec. 2015*) Closed
Loans Purpose Refinance 46%
47% 34% 43%
Purchase
54% 53% 65%
56%
Type FHA 20% 20%
23% 22%
Conventional
66% 68% 64% 65%
VA 9% 9% 9%
9%
Days to Close All 50
49 46 49
Refinance
52 51 47 47
Purchase 48 47 46
50
Percentage of ARM and Fixed Loan Volume
ARM % 4.6% 3.9%
4.8% 5.3%
30-Year Rate Average
4.05% 3.81% 3.97%
4.26%
*All references to months should be read
as month ended.
PROFILES OF CLOSED LOANS FOR DECEMBER 2016
Closed First-Lien Loans
(All Types) FICO Score (FICO) 726
Loan-to-Value (LTV) 78
Debt-to-Income
(DTI) 25/38
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 September 2016 applications—to calculate an overall closing
rate of 73 percent in December 2016 (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
that closed three and six months earlier. 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 a leading provider of innovative
on-demand software solutions and services for the residential
mortgage industry. Mortgage lenders of all sizes use Ellie Mae’s
Encompass® all-in-one mortgage management solution, Mavent
Compliance Service, and AllRegs research, reference and education
resources to improve compliance, loan quality and efficiency across
the entire mortgage lifecycle. Visit EllieMae.com or
call (877) 355-4362 to learn more.
PRESS CONTACTS
© 2017 Ellie Mae, Inc. Ellie Mae®, Encompass®, AllRegs®,
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.
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version on businesswire.com: http://www.businesswire.com/news/home/20170118005378/en/
Ellie Mae, Inc.Erica Harvill,
925-227-5913Erica.harvill@elliemae.comorAllison+PartnersAlexandra
Gardell Kreuter, 646-428-0618EllieMae@allisonpr.com
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