Loan originators managed to overcome the slowdown that normally precedes a holiday week and pushed activity higher. Leading the way were purchase transactions and government-insured business.
Loan pricing inquiries increased 3 percent from last week, lifting the U.S. Mortgage Market Index from LoanSifter and Mortgage Daily for the week ended May 24 to 264. Business was 4 percent better than the same week last year.
An 8 percent rise from the week ended May 17 was recorded for purchase financing activity, while the year-over-year increase for the category was 16 percent.
Close behind were inquiries for mortgages to be insured by the Federal Housing Administration, which improved by 7 percent. But FHA business was 3 percent worse than the week ended May 25, 2012.
FHA loans accounted for 15.3 percent of overall activity. FHA share rose from 14.8 percent in the previous report but narrowed from 16.3 percent in the same week a year ago.
Conventional business improved 3 percent for the week and was 2 percent higher than a year earlier.
Refinance activity was little changed, rising 1 percent from the previous report and off 2 percent from the same week in the previous year.
A little less than two-thirds of this week’s inquiries were for refinances versus a little more than two-thirds last week. Refinance share was 68.1 percent 12 months prior. The rate-term portion of inquiries was 51.1 percent, and cashout share was 13.4 percent.
A less than 1 percent week-over-week decline was recorded for adjustable-rate mortgage inquiries, while ARM activity has plummeted 47 percent from the year-earlier week. ARM share slipped to 4.5 percent from 4.7 percent and has tumbled from 8.9 percent 12 months earlier.
Jumbo mortgage inquiries turned in the worst performance, falling 3 percent for the week but hardly different than the level a year ago. Jumbo share was trimmed to 5.2 percent from 5.6 percent in the last report and 5.4 percent in the year-earlier report.
The spread between interest rates on jumbo and conforming loans was little changed from last week at 26 basis points. Jumbo loans were priced at a 45-basis-point premium this week last year.
The average 30-year, fixed-rate mortgage was 3.910 percent in the latest report, climbing 8 BPS over the past seven days. Thirty-year rates were off 5 BPS from a year ago.
At 77 BPS, the discount for a 15-year mortgage wasn’t as good as the 78-basis-point-discount a week ago. But 15-year loans are more competitive than at the same point in 2012, when the spread was 73 BPS.
Mortgage rates aren’t likely to be much different in the next Mortgage Market Index report based on this week’s Treasury market activity.
The yield on the 10-year Treasury note, which is generally tracked by long-term fixed rates, averaged 1.99 percent this week, according to Treasury market data. The 10-year yield closed at 2.01 percent Friday.
