Loans for home refinance made up 51 percent of all loan originations in January, an 8 percent jump compared to December.   Ellie Mae's Origination Insight Report said this was the highest share refinancing has had in more than 18 months. 

Refinancing hit a low at 32 percent in July but as interest rates retreated from early 2014 highs, the share of refinancing increased steadily.  In all of 2014 refinancing averaged a 38 percent share of originations.  Despite the jump in volume, the average time to close a refinance loan fell from 42 days to 39 days.

Ellie Mae said the closing rate for all loans rose for the fifth consecutive month to 62.4 percent, the highest level since Ellie Mae began tracking this data in 2011.  The closing rate on refinancing was 56.5 percent and for purchase loans 68.3 percent. 

"Many home owners who put off refinancing over the past year because they did not have equity in their homes are getting a second chance in 2015," said Jonathan Corr, president and CEO of Ellie Mae. "Low rates and the decision by the FHA to lower the mortgage insurance premium (MIP) are good news for the purchase market as well."

The refinancing share of conventional loans was even higher than the overall share at 62 percent.  However purchase loans dominated with both FHA and VA originations.  Purchases made up 82 percent of the former and 58 percent of the latter.

Conventional mortgages had a 70 percent share of the total market compared to 67 percent in December while the FHA share dropped to 15 percent from 20 percent.  VA lending was 11 percent of the market, unchanged since October.

The percentage of closed loans with an average FICO score below 700 dropped from 32 percent in January 2014 to 30 percent last month and the average score for all loans was 731, 5 percentage points higher than the overall 2014 average.  The FICO score on closed VA refinance loans jumped 8 points from December to 716 and rose from 701 to 704 for purchase mortgages.

The Origination Insight Report mines Ellie Mae data from a large sampling of the approximate 57 percent of all mortgage applications which are initiated on its Encompass® origination platform.