In the final month of 2017, the percentage of refinances rose to 40 percent of all closed loans, up by one percent from November. The percentage of FHA refinances increased to 25 percent of closed loans in the month, up one percentage point from November, while the percentage of conventional refinances increased to 47 percent of closed loans in December, up 2 percent from the month prior.
“As we closed out 2017 we saw an increase in the percentage of refinances due to seasonality as fewer purchases take place in the fourth quarter, and likely homebuyers were taking advantage of the mortgage deductibility limit before it decreased to $750,000 on December 15,” said Jonathan Corr, President and Chief Executive Officer of Ellie Mae. “We probably can also attribute some of the increase in closing rates to last-minute efforts by borrowers to close loans before the tax changes took effect.”
Ellie Mae also reported closing rates on all loans increased from 70.9 percent in November to 71.2 percent in December. Closing rates on refinances were up from 65.1 percent to 65.6 percent, while and closing rates on purchases rose from 75.5 percent to 76.1 percent. Closing rates also increased across FHA, conventional and VA loans for both purchases and refinances.