Interest rates continued to decline in March to the lowest percentage since January 2013, driving up the percentage of refinances, according to the March Origination Insight Report from Ellie Mae.
The 30-year rate on all loans dropped to 3.65 percent, down from 3.86 percent the month prior. The 30-year rate on conventional loans continued to fall in March, dropping to 3.65 percent from 3.89 percent in February. Similarly, the 30-year rate on FHA loans fell to 3.76 percent, down from 3.87 percent the month prior. The 30-year rate on VA loans dropped to 3.45 percent from 3.62 percent in February.
As rates dropped, the percentage of refinances increased, representing 55 percent of closed loans, up from 51 percent in February and 50 percent in January.
Other statistics of note in March included:
- The time to close all loans decreased to 40 days in March, down from 43 days in February.
- Closing rates on all loans decreased slightly to 78.0 percent in March, up from 78.3 percent the month prior. Closing rates on purchases decreased to 80.2 percent from 80.7 percent the month prior and closing rates on refinances decreased to 75.7 percent, down from 76.0 percent in February.
- The percentage of Adjustable Rate Mortgages dropped to 3.2 percent, down from 5.3 percent the month prior.
“Interest rates continued to decline into March, driving the growing share of refinances for another month,” said Jonathan Corr, President and CEO of Ellie Mae. “Despite the impacts of the coronavirus and stock market fluctuations, our lenders are leveraging technology to manage borrower demand for refinances while taking into account the health and safety of all players in the mortgage origination process. With digital solutions for homebuyers and originators like online applications, remote online notarizations, homeowner-guided appraisals and eClosings, our lenders are able to minimize disruptions to their operations and limit in-person interaction.”
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