ICE Mortgage Technology’s Origination Insight Report for October shows that interest rates dropped below 3 percent for the first time since the company began tracking this data in 2011, hitting 2.99 percent.
The 30-year note rate for VA loans dropped to 2.75 percent, down from 2.78 in September, putting it well below the 3.00 percent mark. The 30-year rate on FHA loans held steady at 3.01 percent for the second month, while conventional rates dropped to 3.01 percent, down from 3.02 percent the month prior.
Refinances continued to rise, reaching 60 percent of total closed loans in the month – well above the 2019 high of 51 percent that also occurred in October. Purchase loans dropped to 40 percent of all closed loans in the month down two percentage points from the month prior. Conventional loans ticked back up in October, representing 82 percent of all closed loans in the month, up from 80 percent in September.
The time to close for purchase loans increased to 48 days, up from 47 days in September. Time to close for refinances increased to 57 days, up from 54 days in September.
The FICO score average for all loans held for the second straight month at 753, while closing rates decreased slightly to 76.7, down from 77.1 in September.
“We are continuing to see interest rates decline now dipping below three percent for the first time since we have tracked this data,” says Joe Tyrrell, president, ICE Mortgage Technology, formerly Ellie Mae. “The market clearly remains ripe for refinances, as 60 percent of all closed loans are refis this month, indicating that homeowners are still looking to capitalize on the opportunity to reduce their monthly payments.
“FICO scores remain high, and conventional loans represent 82 percent of all closed loans this month,” he adds. “Homeowners should continue to educate themselves on the various available products to determine what best fits their needs. We will watch to see how the data shifts as we continue into the fall and the global pandemic and election impact the economic outlook.”
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