This week’s mortgage market maintained a little more momentum than last week. All categories but one — adjustable-rate mortgage activity — saw a modest increase. Overall business slowed by more than a quarter compared to this time last year, and ARMs saw the most deterioration.
A 5 percent increase in loan pricing inquiries by mortgage originator clients of Mortech Inc. from a week earlier left the U.S. Mortgage Market Index for the week ended Aug. 24 at 224. The index has fallen 28 percent from a year ago.
Refinances rose 6 percent — the most of any category. Refinance share was mostly unchanged at 71 percent for the week and a little wider than 68 percent during the week ended Aug. 26, 2011. Rate-term refinances represented 57 percent of activity, and cashouts accounted for 14 percent.
There was a 5 percent drop from the week ended Aug. 17, 2012, in inquiries for both conventional mortgages and loans insured by the Federal Housing Administration. But conventional business tumbled 30 percent from a year ago while FHAÂ activity was off only 9 percent.
Inquiries for jumbo mortgages were a little weaker than most categories, up 4 percent from a week ago. Jumbo borrowers were quoted rates that were 63 basis points worse than conforming borrowers, a little worse than the 62 BPS in the prior report.
ARMÂ inquiries weakened 6 percent from last week and have plummeted 70 percent over the past year. The ARM abandonment has been accompanied by fixed rates in the threes — a level that would have been unimaginable before the financial crisis saw its darkest days in September 2008 — when 30-year rates were averaging around 6 percent.
The 30-year fixed-rate mortgage averaged 3.774 percent this week, creeping up from 3.749 percent seven days earlier. The 30 year averaged 4.351 percent this week in 2011.
A 69-basis-point discount was quoted to prospective borrowers who picked a 15-year mortgage over a 30-year loan, a little wider than the 68-basis-point spread in the prior report.
Thus far, mortgage rates appear to be headed around 8 BPS lower in the next report based on Treasury market activity. The yield on the 10-year Treasury — a benchmark for long-term fixed mortgages rates — average 1.76 percent during the week encompassed by the Mortgage Market Index report, higher than the 1.68 percent that the 10-year yield closed at today, according to data from the Department of the Treasury.
