Plunging mortgage rates lifted the share of refinance loans by four percentage points in October, resulting in a seven-month high, according to a monthly survey. In its latest Origination Insight Report, mortgage technology provider Ellie Mae reported that refinancing activity accounted for 40 percent of overall mortgage volume in October, marking the highest level since March. Refinance share has been on the rise for the past several months as average mortgage interest rates have come down. According to Ellie Mae, the average 30-year fixed rate for all loan types fell for a sixth consecutive month in October, dropping to 4.37 percent, the lowest average since July 2013.
The average credit profile for loans closed in October was little changed from September, with the average FICO score staying flat at 726 and the average loan-to-value ratio slipping one percentage point to 81 percent. On the other hand, the average FICO score for a denied loan application last month dropped 13 points to 681, while the average loan-to-value ratio fell a point to 80 percent. According to the company's data, about one-third of closed loans in October had an average FICO score under 700 compared to just 28 percent the same month last year.
Sales of pre-owned homes improved for a second straight month in October, beating their year-ago levels for the first time in a year even as the typically slower fourth quarter got underway. Total existing-home sales in October came in at a seasonally adjusted annual rate of 5.26 million, up one and a half percent from September, according to transaction data from the National Association of Realtors (NAR). It's been a rollercoaster year for existing-home sales, which spent much of the first half of 2014 under the 4 million mark as the economy experienced an early stall. Since then, sales numbers have crept up but still hadn't been able to match 2013's pace until October.