Mortgage Apps Up, Closed Refinances Rise
September 19, 2018
Mortgage applications were on the rise while the percentage of closed refinances surged, according to the latest mortgage industry data.
The Mortgage Bankers Association’s Market Composite Index for the week ending Sept. 14 was up 1.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the index rose by 12 percent compared with the previous week.
The seasonally adjusted Purchase Index inched up by 0.3 percent from one week earlier while the unadjusted index saw a more robust spike of nine percent compared with the previous week and was four percent higher than the same week one year ago. The Refinance Index increased four percent from the previous week while the refinance share of mortgage activity increased to 39 percent of total applications from 37.8 percent the previous week.
Among the federal programs, the FHA share of total applications increased to 10.6 percent from 10.4 percent the week prior while the VA share of total applications decreased to 10.0 percent from 10.5 percent and the USDA share of total applications decreased to 0.7 percent from 0.8 percent the week prior.
Separately, Ellie Mae reported the percentage of closed refinances increased for the first time this year, rising from 29 percent in July to 32 percent in August. said Jonathan Corr, President and CEO of Ellie Mae, attributed this to the interest rate environment.
“The rise in interest rates has slowed since June, and we are seeing the percentage of refinances increase month-over-month since May,” said Corr. “This may reflect consumers taking an opportunity to refinance with the corresponding increase in equity.”
Ellie Mae also reported that closing rates for all loans increased to the highest percentage of the year during August at 71.1 percent, up from 70.9 percent the month prior. Closing rates on purchase loans increased to 75.9 percent, up from 75 percent the month prior. However, closing rates on refinances dropped slightly to 63.5 percent, down from 63.7 percent in July. And the overall FICO scores decreased by one point in August to 724 while LTV decreased to 79 and DTI held at 26/39.
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