A combination of lower rates and more Millennial homebuyers has resulted in a refinance closing rate that took six days longer from April to May, according to new data from Ellie Mae.
The 42-day refinancing closing day speed in May, compared to 36 days in April, is the lowest rate since February 2018. Ellie Mae added that closing on conventional loan refinancing also took 42 days in May, compared to 36 days in April, while time to close for VA refinances jumped from 40 days to 45 days and FHA refinance closings declined from 42 days to 41 days. The time to close for Millennials on all purchase loans remained flat at 40 days month-over-month.
“Refinance activity amongst Millennials continued to rise as interest rates dropped,” said Joe Tyrrell, chief operating officer at Ellie Mae. “Time to close has been trending downward recently, but in May, the volume of activity pushed the mortgage finance industry to a tipping point where it spiked dramatically. As the digitization of the mortgage process continues to evolve, increased automation will help borrowers and lenders close all loan types more efficiently, even during periods of increased activity.”