Interest rates on residential loans moved higher this week, helping to pull down new mortgage activity. Leading the decline were inquiries for refinances.
The U.S. Mortgage Market Index from LoanSifter and Mortgage Daily for the week ended Feb. 21 was 145, slipping 7 percent from seven days earlier. The index was not adjusted to reflect the President’s Day holiday.
The index has retreated 39 percent compared to the same week in 2013. The year-earlier figures were revised to reflect a change in data providers.
Refinances slowed by 11 percent compared to the week ended Feb. 14 and have plunged 59 percent compared to a year earlier.
Refinance share fell to 46.4 percent from 48.6 percent and was much higher at 69.7 percent a year prior. The latest share included a 32.2 percent rate-term share and a 14.3 percent cashout share.
Inquiries for jumbo mortgages also took a big hit, falling 10 percent from the last report. But jumbo business has increased 18 percent from the week ended Feb. 22, 2014. Jumbo share slipped to 10.2 percent from 10.5 percent but has nearly doubled from a year ago, when the share was 5.3 percent.
The spread between conforming loans and jumbo mortgages continues to be nearly non-existent at 5 basis points, the same as last week. The jumbo-conforming spread was 26 BPS in the same week last year.
Next were conventional mortgage inquiries, which slid 8 percent for the week and tumbled 45 percent from a year earlier.
After that were adjustable-rate mortgages, with ARM pricing inquiries declining 5 percent from seven days earlier. But ARM activity stands 94 percent higher than it did 12 months earlier.
ARM share increased to 13.2 percent from 12.9 percent in the previous report and 4.2 percent in the year-earlier report.
Pricing inquiries for purchase financing slipped a little more than 3 percent but have risen 7 percent on a year-over-year basis.
The week’s best performance was delivered by inquiries for Federal Housing Administration-insured loans, which fell less than 3 percent from the last report. Still, FHA business remains down 47 percent from the same week in 2013.
FHA share rose to 15.8 percent from 15.1 percent but has fallen from 18.2 percent one year prior.
Weakening activity was partially driven by rising mortgage rates, with conventional 30-year fixed rates climbing to 4.669 percent from 4.629 percent last week and 3.846 percent in the same week last year.
Rates on 15-year mortgages were 100 BPS better than 30-year rates. The spread was 99 BPS last week and 76 BPS a year ago.
No change is likely for mortgage rates in the next Mortgage Market Index report based on this week’s Treasury market activity.
A benchmark for fixed mortgage rates, the yield on the 10-year Treasury note, averaged 2.73 percent during the week reflected in the latest report, while it closed at 2.73 percent Friday.
