Low Rates Continue to Fuel Growth in Refi Volume, According to Ellie Mae Origination Insight Report

Share of refinance volume jumped 5% in November to the highest level since July

PLEASANTON, Calif. – December 17, 2014 – Lenders’ share of mortgage refinancing volume rose for the fourth straight month in November as mortgage interest rates continued to fall, 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. Since July, refinances as a percentage of lenders’ overall loan volume has climbed 13 percent from a 2014 low of 32 percent.

In addition to higher refinance volume, total closing rates on purchase loans rose to 66.5 percent, the highest since Ellie Mae began tracking this figure in August 2011. Meanwhile, the average 30-year fixed interest rate dropped to 4.273 percent, its lowest level since June 2013.

“With 2014 coming to an end, lenders are hopeful for a steady improvement in market conditions,” said Jonathan Corr, president and COO of Ellie Mae. “Winter is normally a slow time for housing sales, yet the increase in refinancing volume is protecting many lenders from the cold. Meanwhile, lower interest rates and the return of the GSEs’ three-percent down payment loan programs may help lenders and homebuyers get off to a great start this New Year.”

The Origination Insight Report mines its application data from a robust sampling of approximately 57 percent of all mortgage applications that were initiated on the Encompass® origination platform. Ellie Mae believes The Origination Insight Report is a strong proxy of the underwriting standards employed by lenders across the country.

Other findings of the report include:

  • The average length of time to close a purchase loan rose to 41 days, up one day since October.
  • The average time to close a refinance loan dipped to 37 days, tying the lowest mark of the year.
  • Credit requirements are roughly the same as one year ago, as 31 percent of borrowers had an average FICO score of under 700 compared to 30 percent in November 2013.

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