Experts have been calling for a return to a purchase money mortgage market for some time now and it finally appears to be happening.
For closed mortgage loans in June 2021, new home purchases represented a higher percentage than refinances, according to the monthly Origination Insight Report from ICE Mortgage Technology. This is the first time since December 2019 that purchases eclipsed refinances in the OIR.
According to the report, purchases rose to 51% of closed mortgage loans in June, up from 47% in the month prior. Conversely, refinances represented 48% of closed loans, down from 52% the month prior. The remaining one percent of closed loans were for other purposes.
“While we are still seeing a strong refinance market, including the continued growth of cash-out refinances, the traditional summer purchase market is clearly evident in the data,” said Joe Tyrrell, President of ICE Mortgage Technology. “These numbers are a testament to the strong and resilient demand for homeownership and the demand for ICE Mortgage Technology’s digital solutions.”
The OIR also notes that in June, the average time to close all loans decreased to 49 days, down from 53 days in May. The average time to close a refinance dropped to 48 days, down from 55 days the month prior. However, the average time to close a purchase was 51 days, up from 50 days the month prior.
Closing rates for all loans decreased slightly, to 75.3% in June, down from 76.9% in May. Closing rates on refinances decreased to 74.6% in June, down from 77.0% in May. Closing rates on purchase loans dropped to 76.3% in June, a slight decrease from 77.0% in May.