The mortgage market moves to purchase

It had to happen eventually. For the first time since December 2019, purchase mortgages represented a higher percentage of closed mortgages than refinances.

Purchase mortgages rose to 51% of closed mortgages in June, up from 47% in May, according to the latest origination report from ICE Mortgage Technology (formerly Ellie Mae). Refinances represented 48% of closed loans.

“While we are still seeing a strong refinance market, including the continued growth of cash-out refinances, the traditional summer purchase market is clearly evident in the data,” Joe Tyrrell, President of ICE Mortgage Technology, said in a statement that accompanied the report.

The origination report found that the average time to close all loans decreased to 49 days in June, a decline from 53 days in May. The average time to close a refi decreased to 48 days from 55 days in May. Things were a bit slower in purchase – the average time to close one hit 51 days, up from 50 days the month prior.

The data show closing rates for all loans decreased to 75.3% in June, down from 76.9% in May. Closing rates on refinances fell to 74.6% in June, down from 77% in May. Closing rates on purchase mortgages dropped to 76.3% in June, a small drop from 77% in May.

The data is based on a representative sampling of the mortgage applications initiated on ICE’s Encompass Lending Platform.

Six months prior, in December 2020, refinances comprised 60% of total closed loan volume. According to ICE’s report, 78% of loans originated in June were conventional, 11% were FHA and 7% were VA, virtually the same from May. The average 30-year fixed-rate mortgage was 3.22% in June, down from 3.27% in May but up from 2.93% in December 2020. A year ago, the average 30-year fixed rate was 3.40%.

Rates have fallen since June, largely due to economic anxiety related to COVID-19 cases and a commensurate drop in 10-year treasuries. In mid-July, the Federal Housing Finance Agency rolled back the adverse market fee, which had added 50 basis points to most refinanced mortgages.

The post The mortgage market moves to purchase appeared first on HousingWire.