Refinancing continued to account for the largest share of mortgage originations in September, 53 percent of the total compared to 52 percent in October. ICE Mortgage Technology's Origination Insights Report said this was the largest share for refinancing since last April.
Conventional loans continue to be the overwhelming choice of borrowers, accounting for 80 percent of originations during the month, unchanged from August. The shares of FHA and VA loans, 12 percent and 5 percent, respectively, are also the same as in August.
The time to close a purchase loan increased from 49 days to 50 days which accounted for an increase of one day in all closing times, to 47 days. The time to close also increased for each loan type by one day compared to August, to 52 days for FHA loans, 46 days for conventional, and 53 days for VA loans. All increases were due to longer purchase timelines.
The average interest rate for closed loans decreased to 3.15 percent during the month. The rate was 3.17 percent in August.
The closing rate for loans increased from 78.4 percent in August to 78.7 percent in September, with an 80.6 percent closing rate for purchase loans, up 0.5 point from the prior month. The rate for refinances rose from 77.0 to 77.2 percent. ICE calculates the closing rate based on applications received 90 days earlier: June in this case.
ICE's Origination Insight Report mines its application data from a large sample of approximately 80 percent of all mortgage applications initiated on its proprietary platform. The company says the report is a strong proxy of the underwriting standards employed by lenders across the country.