The percentage of purchase home loans relative to refinancings continued to increase, 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. In May, home purchases represented 68 percent of all closed loans, a three percent increase from the month prior.

Specifically, the percentage of Conventional purchase loans increased to 61 percent. FHA purchase loans increased to 82 percent and VA purchase loans increased to 73 percent.

The average 30-year note decreased for the first time in 2017 to 4.33 percent, down from 4.41 percent the prior month, but still up from 4.06 percent from the same period last year. The percentage of Adjustable Rate Mortgages (ARMs) on Conventional loans continued its rise to 7.5 percent in May, up from 7.3 percent the month prior and 5.5 percent one year ago. Additionally, the average time to close all loans held steady at 42 days in May. The time to close a refinance also held at 41 days and the time to close a purchase remained at 42 days.

“The start of the peak summer homebuying period combined with fewer refinances due to higher interest rates, drove purchases to the largest percentage of total loans since we began tracking data in 2011. Home loan purchases represented 68 percent of total closed loans, a 3 percent increase from the prior month,” said Jonathan Corr, president and CEO of Ellie Mae.

The Origination Insight Report mines its application data from a robust sampling of approximately 80 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 data from 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.

MONTHLY ORIGINATION OVERVIEW FOR MAY 2017

                                 
      May 2017*       Apr. 2017*      

6 Months Ago

      

1 Year Ago

                       

(Nov. 2016*)

      

(May 2016*)

Closed Loans                                
Purpose                                
Refinance       32%       35%       47%       37%
Purchase       68%       65%       53%       62%
Type                                
FHA       23%       23%       20%       23%
Conventional       63%       63%       68%       64%
VA       10%       10%       9%       9%
Days to Close                                
All       42       42       49       45
Refinance       41       41       51       44
Purchase       42       42       47       45
Percentage of ARM and Fixed Loan Volume
ARM %       6.1%       5.9%       3.9%       4.5%
30-Year Rate                                
Average       4.33%       4.41%       3.81%       4.06%

*All references to months should be read as month ended.

 

PROFILES OF CLOSED LOANS FOR MAY 2017

         
     

Closed First-Lien Loans

       

(All Types)

FICO Score (FICO)       723
Loan-to-Value (LTV)       80
Debt-to-Income (DTI)       25/39
 

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 February 2017 applications—to calculate an overall closing rate of 70 percent in May 2017 (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.

© 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.