MReport October 2020

TheMReport — News and strategies for the evolving mortgage marketplace.

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M R EP O RT | 51 O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST ORIGINATION Summer Mortgage Origination Insights Gain insights into purchase loans, refi trends, and where things may be headed. E llie Mae, a cloud-based loan origi- nation platform provider for the mortgage industry and now part of Intercontinental Exchange, Inc., has just released its Origination Insight Report for the month of August. Data showed that refinances experienced a rebound during the month, the majority of closed loans in August rounding out at 56%. This is a slight uptick from the previous month of July's 54%. As for the percentage of purchases, that conversely fell (down to 44%) during the month of August. This dip was only a slight one, down from July's 46%. All of this Ellie Mae information arrives as the 30-year rate on all loans steadily fell to its lowest rate (3.09%) since the respected institution for began tracking the data. July's 30-year loan rate was a bit higher (3.24%). Regarding the 30-year note rate, VA loans experienced a slight dip during August, falling to 2.86% (down from July's 3.02%). As for conventional loans, their 30-year note rate dipped down to 3.12% in August (from July's 3.26% rate). Also falling was the 30-year rate on FHA loans, which ducked down to 3.10% during the month of August. The 30-year rate on FHA loans during July was slightly higher at 3.26%. Other highlights from the Ellie Mae find- ings included facts such as the time win- dow for closing all loans, which increased to 49 days during August. This showed a slight uptick from July's 47-day time window for closing. For the closing of pur- chase loans specifically, that time window increasing to 45 days during August (up from July's window of 44 days). As for the time window for closing refinances, that increased to 51 days in August, up only one day from July's 50-day window for closing. Further noteworthy findings were that FICO scores rose to all-time highs for this year thus far (up to 752 for all loans in August, while July's reported scores were 750), and closing rates experienced a slight uptick to 77.2%. July's closing rates were 77.1%. Competition Remains Fierce Among Buyers Agents say anything on sale for less than $600,000 has multiple offers. A ccording to a recent report released the real estate experts at Redfin, more than half (54.5%) of its home offers were embroiled in bidding wars during the month of August 2020. Although these recent findings dipped from July's revised rate of 57.3%, these statis- tics still prove that the competi- tion remains fierce in the housing market today. The report pinpoints the hottest regions of the real estate market, which still include some of the pricier coastal regions, such as the San Francisco and San Diego. Those two areas are among the three most competitive markets reported in August. Fast on their heels was Salt Lake City (each of these locales' averaged about 65% of Redfin offers facing bidding wars). Other sizzling spots across the nation where bidding wars raged included America's more affordable regions, such as inland metros. The top three of these locales were Sacramento, followed by Phoenix, and then Austin. With such encouraging sta- tistics showing that the housing market is alive and pulsing, it continues to be one of the few beacons of light in a year filled with uncertainty (and an economy that reflects that instabil- ity). The main factors that are contributing to this hot housing market right now, according to experts, directly resulted from the pandemic and include the histori- cally low mortgage rates we are experiencing (the average 30-year fixed rate was 2.91% the week end- ing August 27), and a tight supply of homes for sale. San Diego Redfin agent Lisa Padilla commented on the current state of the housing market: "The market is on fire. There just isn't enough on the market to supply the huge demand for homes." Padilla further commented on who is buying most at the mo- ment, and what: "A lot of military buyers are trying to take advan- tage of the low interest rates for VA loans. Anything on sale for less than $600,000 has multiple offers, and sometimes they're getting more than 20 offers. Only condos are a little slow, as most buyers want a home with a yard."

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