Share of refinances level out as home buyers continue to take advantage of low rates
The percentage of closed refinances held steady at 65% for the second straight month in May as interest rates continued to decline.
The latest Ellie Mae Origination Insight Report showed that the 30-year rate on conventional loans fell from 3.48% in April to 3.43% in May. FHA loans and VA loans also posted month over month declines. The 30-year rate on FHA loans was down to 3.45%, while the rate on VA loans dropped to 3.24% in May.
The rise in refinances has slightly pushed FICO scores on all loans up from 749 in April to 750 in May. The time to close all loans was extended from 42 days in April to 45 days in May. Closing rates also went downhill from 78% in March to 76.5% in April, and to 76% in May.
"Interest rates continued to decline in May, but we are seeing signs of refinances leveling out as the percentage of closed refinances held at 65% for the second month," said Jonathan Corr, president and CEO of Ellie Mae. "As we enter the summer months that typically bring a busier purchase market, we will watch to see if the numbers shift further as homebuyers continue to take advantage of low rates and a loosening of inventory after a tight March and April driven by the shelter in place."
