New business picked up this week thanks to an increase in new activity for adjustable-rate mortgages, government-insured loans and purchase financing. Jumbo activity slowed despite more competitive jumbo pricing.
Moving higher for the first time in five weeks, the U.S. Mortgage Market Index from LoanSifter and Mortgage Daily for the week ended Aug. 23 was 193.
The index, which reflects the average pricing inquiries per LoanSifter user, increased 4 percent from a week earlier. But it was off more than a quarter from the same week in 2012.
Helping fuel the improvement were ARM inquiries, which jumped 14 percent from the week ended Aug. 16 and have soared 90 percent from the same week last year.
ARMÂ share was 10.7 percent — the highest it’s been since it was 11.0 percent in the week ended July 29, 2011. ARM share was 9.7 percent a week earlier and 4.1 percent a year earlier.
Also behind the overall increase were inquiries for loans insured by the Federal Housing Administration, which climbed 11 percent for the week but tumbled 29 percent on a year-over-year basis. FHAÂ share moved up to 16.5 percent from 15.4 percent but was lower than 17.0 percent in the week ended Aug. 24, 2012.
Another big mover was the purchase category, with inquiries up 9 percent over the prior seven days and up by half from one year prior.
Conventional business increased 4 percent from last week but was down nearly a third from 12 months earlier.
A 2 percent week-over-week decline was recorded for refinances, while the year-over-year decline was 54 percent.
Refinance share narrowed to 46.5 percent from 49.1 percent and plummeted from 73.9 percent one year ago. The latest share reflected a 33.5 percent rate-term share and a 13.1 percent cashout share.
Jumbo mortgages delivered the worst performance, falling 9 percent from seven days earlier. But inquiries for jumbo loans have ascended 44 percent from the same week last year. Jumbo share was 7.4 percent, off from 8.5 percent in the previous report but nearly double the 3.8 percent during this week in 2012.
The poor jumbo performance was puzzling given that jumbo rates were just 25 basis points more than conforming rates. The previous week’s jumbo-conforming spread was 37 BPS, while the jumbo-conforming spread was 56 BPS one year prior.
Conforming 30-year fixed rates averaged 4.839 percent, climbing from the previous week’s 4.662 percent. Thirty-year rates were just 3.841 percent at the same point in 2012.
A 96-basis-point discount was quoted for 15-year rates, better than the 93-basis-point spread last week. Fifteen-year loans were priced 66 BPS lower than 30-year rates 12 months ago.
Mortgage rates could be around 4 BPS lower in the next report, according to a Mortgage Daily analysis of this week’s Treasury Market activity.
During the week encompassed by the latest Mortgage Market Index, the 10-year Treasury yield averaged 2.86 percent, while the 10-year yield closed at 2.82 percent Friday, according to Treasury Department data.
Treasury yields moved lower today thanks to a dismal new home sales report. The report, from the Department of Housing and Urban Development and the Census Bureau, indicated that new home sales tumbled 13.4 percent from a downwardly revised June rate to a seasonally adjusted annual rate of 394,000 in July.
