New mortgage activity raced to the highest level in 12 weeks as borrowers rushed to lock in their interest rates on refinances — though all categories of lending were stronger. Helping to drive the second consecutive week of improvements were lower rates.
There were 32 percent more rate locks in the U.S. Mortgage Market Index from Optimal Blue and Mortgage Daily for the week ended March 1 than there were in the previous report — when activity was also up. The resulting index of 253 was higher than in any week since Dec. 7, 2012, when the index came in at 256.
The Mortgage Market Index was 68 percent higher than the revised index level in the same week during last year.
The biggest gain was chalked up for refinance rate locks, which jumped 40 percent from the week ended Feb. 22. The gain from a year earlier was 68 percent.
Refinance share widened to 47.6 percent from the previous week’s 44.7 percent but barely changed from the week ended March 2, 2012. This week’s share reflected a 37.5 percent rate-term share and a 10.2 percent cashout share.
The next-biggest mover was the adjustable-rate mortgage category, with ARM rate locks increasing 38 percent from the previous week. ARM business was up 20 percent from a year ago. ARM share inched up to 4.4 percent from 4.2 percent but was lower than the 6.1 percent in the year-earlier report.
With a one-third week-over-week gain, jumbo activity followed. Jumbo rate locks were 92 percent stronger than in the same week last year. Jumbo share moved up just past 9.0 percent from just under 9.0 percent seven days prior and was 7.9 percent during the same week in the previous year.
Jumbo loans were priced 19 basis points higher than their conforming counterparts, improving from the 25-basis-point jumbo-conforming spread in the prior report and much better than the 52-basis-point spread a year earlier.
Close behind were conventional rate locks, which were up a third for the week and more than three-quarters higher than at the same point in 2012.
Rate locks for mortgages insured by the Federal Housing Administration were up more than a quarter from the previous week and 37 percent higher than the same week in the previous year. FHA share slipped to 18.2 percent from 19.0 percent in the prior report and was down from 22.3 percent a year prior.
With a one-quarter gain from seven days earlier, purchase financing was the week’s weakest category, though rate locks for purchase-money mortgages have surged by 68 percent from a year ago.
Mortgage business was stronger this week as 30-year conforming fixed-rates averaged 3.857 percent, lower than 3.917 percent in the previous report and 4.193 percent one year prior.
