Ellie Mae’s monthly Origination Insight Report (OIR), which aggregates data from its lending platforms and networks to display general national trends in the loan servicing industry, shows a rise in the percentage of home loan purchases in December.
Per the report, home loan purchases made up 54 percent of all closed loans in December, which is slightly higher than the November figure of 53 percent. The December figure is slightly higher than the year’s initial rate of 52 percent in January, but considerably lower than the high of 65 percent in June.
During the same period, the 30-year rate governing all loans rose from 3.81 to 4.05 percent, which likely caused the decrease in the amount of closed loans used for refinancing purposes, which dropped to 46 percent in December from 47 percent in November.
The closing rates for homes in December increased to 73.2 percent, which is a percentage point higher than November’s figure, while the refinance closing rate was 69.6 percent at December’s close.
Ellie Mae expects this to be a continuing trend throughout 2017 as the 30-year rate continues its upward climb.
“As rates began to increase we saw purchases tick back up in December, signaling the start of a trend we expect to continue into 2017,” said Jonathan Corr, President and CEO of Ellie Mae. “We also saw closing rates rise to the highest percentage in 2016 as homebuyers locked in rates and lenders closed loans before the conclusion of the year.”
Average FICO Scores were down to 726 in December from 728 in November but still up from the average FICO score of 719 in January. FHA purchase FICO scores stayed level at 686, while the FHA refinance FICO scores saw a decrease of one point, ending up at 655 for December. Conventional purchase FICO scores were 753 in December, staying even with the past three months and consistent with the 2016 average FICO score of 753.