30-Year Note Rate Declines Further According to May Origination Insight Report; Time to Close Increases as Purchase Market Heats Up

PLEASANTON, Calif.–(BUSINESS WIRE)–According to the May Origination
Insight Report
from Ellie
Mae
®, the leading cloud-based platform provider for the
mortgage finance industry, the 30-year note rate dropped for the fifth
straight month to 4.52%, down from 4.61% in April. The time to close
crept up to 42 days for all loans, up from 40 days the month prior.
There was a substantial jump in the time to close refinances, rising
from 33 days in April to 37 days in May. Time to close purchase loans
increased one day from 43 days in April to 44 days in May.

“As the 30-year note rate declines for yet another month, we are seeing
purchase and refinance activity on the rise,” said Jonathan Corr,
President and CEO of Ellie Mae. “Closing rates remain well over 75% and
with the Mortgage Bankers Association reporting solid purchase volume
and new inventory on the rise, we could be in for a very robust summer
home buying season.”

Other statistics of note in May included:

  • The percentage of refinances decreased to 32% while purchases made up
    68% of total closed loans.
  • The percentage of Adjustable Rate Mortgages (ARMs) decreased to 6.7%,
    down from 6.8% in April.
  • Closing rates increased to 75.6%, up from 74.8% in April.

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

In addition to the Origination Insight Report, Ellie Mae also
distributes data from its monthly Ellie Mae Millennial
Tracker
on the first Wednesday of each month. The Ellie Mae
Millennial Tracker focuses on mortgage applications submitted by
borrowers born between the years 1980 and 1999.

MONTHLY ORIGINATION OVERVIEW FOR MAY 2019

    May 2019*   Apr. 2019*   6 Months Ago

(Nov. 2018*)

  1 Year Ago

(May 2018*)

Closed Loans
Purpose
Refinance 32% 35% 30% 30%
Purchase 68% 65% 70% 70%
Type
FHA 19% 20% 19% 20%
Conventional 66% 66% 65% 66%
VA 10% 10% 10% 10%
Days to Close
All 42 40 46 41
Refinance 37 33 43 37
Purchase 44 43 48 43
Percentage of ARM and Fixed Loan Volume
ARM % 6.7% 6.8% 8.9% 6.6%
30-Year Rate
Average 4.52% 4.61% 5.15% 4.84%

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

PROFILES OF CLOSED LOANS FOR MAY 2019

   

Closed First-Lien Loans
(All Types)

FICO Score (FICO) 728
Loan-to-Value (LTV) 80
Debt-to-Income (DTI) 25/38
 

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
2019 applications—to calculate an overall closing rate of 75.6% in May
2019 (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. 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 is the leading cloud-based platform provider for the mortgage
finance industry. Ellie Mae’s technology solutions enable lenders to
originate more loans, lower origination costs, and reduce the time to
close, all while ensuring the highest levels of compliance, quality, and
efficiency. Visit EllieMae.com
or call (877) 355-4362 to learn more.

© 2019 Ellie Mae, Inc. Ellie Mae®, Encompass®, AllRegs®, Mavent®,
Velocify®, 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.

Contacts

Erica Harvill
Ellie Mae, Inc.
(925) 227-5913
[email protected]

Caitlin Coffee
Allison+Partners
(312) 635-8204
[email protected]

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