Purchase Loans Take Dominant Share of Closed Loans Again
January 22, 2020
Purchase loans accounted for 54 percent of total closed loans in December, according to new data from Ellie Mae. This represents an uptick from the 51 percent level in November and the 2019 low of 49 percent in September. The highest percentage of closing loans recorded this year was 69 percent of closed loans in June.
During December, the time to close all loans rose to 48 days, up from 45 days in November. The time to close a purchase increased to the highest point of the year in December at 51 days while time to close a refinance increased to 45 days, up from 43 days in November.
Closing rates on all loans during December was 77.8 percent, a slight dip from the 2019 high set in November. Closing rates on refinances dropped to 75.5 percent in December, down from 77.1 percent in the previous month, while closing rates on purchases dropped to 80.3 percent, down from 80.6 percent the month before.
“As we closed out 2019, we saw interest rates continue to rise to 3.99 percent, still well below the 2019 high of 5.01 percent in January,” said Jonathan Corr, president and CEO of Ellie Mae. “This drove the increase in purchase percentages back up to 54 percent of closed loans, still well below the 2019 high of 69 percent in June. While we believe that seasonality played a part in the slowing of refinances, we believe that we will continue to see purchase percentages pick up in 2020 as refinance demand normalizes.”
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