Lenders saw the highest amount of refinancing activity since 2013 in January, according to a report released Wednesday by Ellie Mae.
The share of refinancing spiked to 51% of all loan volume in January, the Ellie Mae Origination Insight Report found. January’s share represented a change of eight percentage points from December and stood well above the low of 32% that the refinancing market hit in July 2014. Purchase loans’ share fell to 48%, well below 2014’s average of 61%.
“Homeowners who missed refinancing over the past year because they did not have enough equity in their homes are getting a second chance in 2015,” said Jonathan Corr, president and CEO of Ellie Mae, in a press release.
“Lower rates and the decision by the FHA to lower the mortgage insurance premium are also good news for the purchase market.”
The closing rate for all loans reached 62.4% in January, marking its highest level since 2011.
Meanwhile, interest rates for most loan types fell in January, according to the report. The average rate for a 30-year fixed-rate mortgage dropped nearly one-tenth of a percent to 4.154%, which Ellie Mae reported to be its lowest level since July 2013.
The percentage of closed loans with an average FICO score under 700 also declined this January to 30%, two percentage points lower than in January 2014, the Pleasanton, Calif.-based mortgage data company found.