Applications for refinances increased 8% in February to comprise 59% of lenders' loan volume, up from 51% in January, according to Ellie Mae's Origination Insight Report.
Historically, applications for refinances have averaged around 38% of volume while applications for purchases have averaged around 61%.
Meanwhile, the average time to close a refi loan fell to 36 days, down from 39 days in January, to reach the lowest level since Ellie Mae began tracking this data in August 2011.
Driving the increase in refinance volume is the fact that mortgage rates remained low in February. The average rate for a 30-year fixed-rate mortgage (FRM) fell from 4.154% to 4.008%, the lowest level in two years, according to Ellie Mae's data. The average interest rate for a 30-year FRM from the Federal Housing Administration fell below 4% for the first time since June 2013.
‘The drop in the average 30-year fixed rate in the last few months has kept lenders busy with increased refinance business,’ says Jonathan Corr, president and CEO of Ellie Mae, in a release. ‘Considering the demand, the fact that lenders are taking fewer days to close the average refi loan is very good news.’
The closing rate in February was 60.0% for all loans, down from 62.4% in January. The closing rate for refinances was 53.0%, down from 56.5%, while the closing rate for purchases was 67.2%, down from 68.3%.
The average FICO score for all loans closed in February was 690, up from 674 in January.
The loan data is derived from information flowing through Ellie Mae's origination platform.