Continuing declines in interest rates had some impact along the margins of loan originations in March. Ellie Mae's Origination Insight Report for March reports that 30-year fixed-rate mortgages originated during the month had an average interest rate of 4.77 percent, down from 4.86 percent in February and 5.01 percent in January.
The company reported that the share of originations that were for refinancing ticked up 1 percentage point to 35 percent during the month while the share among FHA loans jumped 3 percentage points to 23 percent. FHA's share of all originations also rose 1 point to 20 percent. The share of conventional and VA loans remained at 64 percent and 11 percent of the total respectively.
Another possible impact of lower rates, the percentage of adjustable rate mortgages (ARMs) decreased to 7.4 percent from 7.6 percent in February. The ARM share was 9.2 percent at the end of 2018.
"As we enter the busy spring home buying season, we are seeing activity tick back up across the board with the 30-year note rate decline," said Jonathan Corr, President and CEO of Ellie Mae. "We will continue to watch closing rates as they have stayed at or above 75 percent through the first quarter of 2019, a possible indication of buyers' conviction."
The time to close loans continued to decrease. For all loans it eased back to 42 days from 43 in February and 45 in January. The time to close a purchase loan dropped to 45 days in March, down from 47 in February and 49 in January.
To get a meaningful view of lender pull-through, Ellie Mae reviewed a sampling of loan applications initiated 90 days prior-or the December 2018 applications-to calculate an overall closing rate of 75.3 percent in March 2019. This is largely unchanged from both the January and February rates.
Ellie Mae mines data for its report from a sample of approximately 80 percent of all mortgage applications that were initiated on its mortgage origination management system. The company state the is a strong proxy of the underwriting standards employed by lenders across the country.