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56 | Th e M Rep o RT o r i g i nat i o n s e r v i c i n g a na ly t i c s s e c o n da r y M a r k e t ANALYTICS the latest local edition loan closing share, credit Profiles tick Up in May The sTaTe of lending is geTTing beTTer as TighT lending percepTions fade. California // An examination of loan data from May shows a slight increase in mortgage clos- ing rates even as credit standards edged up. Drawing from a sampling of mortgage applications from its network, Ellie Mae calculated an overall loan closing rate of 57.8 percent, a bounce up from 55 percent in April. The figure rep- resents applications initiated 90 days prior "[t]o get a meaningful view of lender pull-through," the company said. Of those closed loans, two- thirds were for home purchases, the highest share on record. "Since January, purchase share has increased by at least three percentage points per month, and purchases now represent 66 percent of all closed loans," said Jonathan Corr, president and COO of Ellie Mae. Just over the past year, the share of purchase loans has grown nearly 25 percentage points. At the same time, ongoing declines in overall applica- tion volumes means that total purchase numbers are lagging compared to where they were a year ago. According to the most recent analysis from Capital Economics, applications for home purchases in the month of May were down 17 percent annually as a result of perceived lending tightness, rising mortgage rates, and prohibitive home prices in some areas. As refinances keep slipping against purchase share, market partici- pants are hoping to see purchase activity pick up the slack. Among loan types, the share of conventional mortgages remained the same at 64 percent, while mortgages backed by the Federal Housing Administration (FHA) also were unchanged at 22 percent of all loans. For the first time, Ellie Mae also included data for loans insured by the Department of Veterans Affairs, which made up 9 percent of May's closed loans. Looking at closed loans, Ellie Mae calculated an average FICO score of 727, just up from 726 a month before. FICO scores on closed mortgages have risen steadily since March. Meanwhile, the average loan- to-value ratio for a closed loan was 82 percent for the sixth straight month. For denied applications, the average FICO score was down slightly to 689, while the average loan-to-value ratio was flat at 82 percent. single-Family starts decline in May; Permits Pick Up new homes are down, buT building permiTs are up in whaT may be The beginnings of renTer culTure. washington, D.C. // Despite a month-to-month decline from April, new housing construction looked relatively solid in May compared to recent months. According to figures released by the Census Bureau and HUD, privately owned housing starts last month were at an estimated, seasonally adjusted annual rate of just more than 1 million, down 6.5 percent from April's slightly-revised estimate of 1.07 million, but the numbers still show the second-strongest month this year. Compared to May 2013, homebuilding in April was up 9.4 percent. The government's report presented mixed news on the single-family front: while starts were down nearly 6 percent to a rate of 625,000, April construction was stronger than originally reported, rising up to 664,000 from an initial estimate of 649,000. Multifamily starts, meanwhile, fell 8.3 percent to an annualized rate of 366,000. While ANALYTICS