Mortgage refinance rates climbed another 8 percent in February to 59 percent, making it the highest it has been since May 2013. According to Ellie Mae’s Origination Report released Wednesday, that number is almost double the rate seen six months ago in August 2014 and 16 percentage points higher than the year-over-year figure of 38. President and CEO of Ellie Mae Jonathan Corr said the drop in the average 30-year fixed rate in the last few months has kept lenders busy with increased refinance business.
Federal Housing Administration refinances rose 19 percent to 36 percent overall. Conventional refinances rose 6 percent from January and VA refinances had a slight drop from January to 41 percent. All numbers were higher than the year-over-year figures. The average time it took to close a refinance loan fell to 36 days, its lowest level since Ellie Mae began its report in 2013. It took 3 more days on average to close a refinance loan in January. The average time to close an FHA refinance was even lower at 33 days.
Three U.S. House Democrats have introduced legislation to reform the housing finance system in an effort to protect the fixed-rate 30-year mortgage. Representatives John K. Delaney, John Carney and Jim Himes said the bill would wind down Fannie Mae and Freddie Mac and allow the GSEs to be sold and recapitalized. The congressmen say protecting the 30-year fixed rate mortgage is key because it ensures home affordability for the middle class and shields American taxpayers from future bailouts by reforming the housing finance system.