Mortgage rates maintained their record-low levels, but that wasn’t enough to lure more mortgage shoppers out into the market. Adjustable-rate activity took the biggest hit. Record-low rates aren’t likely to remain low for long.
A 4 percent decline from last week left the U.S. Mortgage Market Index from Mortech Inc. and Mortgage Daily for the week ended Oct. 5 at 240. The index was down by a quarter compared to the same week last year.
The decline was disproportionately sharp for adjustable-rate mortgages, with ARM pricing inquiries down 10 percent from the week ended Sept. 28. ARM business has plummeted 63 percent over the past year.
Just 2.4 percent of all inquiries this week were for an ARM, diminishing from 2.6 percent in the prior report and 4.9 percent in the week ended Oct. 7, 2011.
The next-biggest decliner was the jumbo category — falling to 5 percent for the week. Jumbo share slipped to 8.8 percent from last week’s 8.9 percent share. The premium for a jumbo mortgage climbed to 78 basis points from last week’s 73 BPS.
New refinance inquiries were down nearly 5 percent from last week and were off by nearly a fifth from the same week last year. Refinance share inched down to 76 percent from 77 percent but rose from 71 percent in the same week during 2011. Rate-term share was 63 percent this week, and cashout share was 14 percent.
Inquiries for mortgages insured by the Federal Housing Administration dropped 4 percent for the week and were down 21 percent from the same week in 2011. FHA share was 9.8 percent, off from 9.9 percent in the previous report. FHAÂ share was 9.4 percent at this time last year.
Conventional business fell 4 percent from last week and was more than a quarter off of last year’s number.
The best performance was with purchase inquiries, which drifted down 1 percent. But purchase activity stands 40 percent below the year-earlier level.
Thirty-year mortgages averaged 3.411 percent, unchanged from last week but still their lowest level ever. The 30-year mortgage averaged 4.100 percent a year ago.
Fifteen-year borrowers paid rates that were 62 BPS better than 30-year borrowers paid, an improvement from the 59-basis-point discount in the last report and this week in 2011.
Mortgage rates are likely to be 10 BPS worse in the next Mortgage Market Index report based on Treasury market activity. The yield on the 10-year Treasury averaged 1.65 percent during the days covered in the report, while the 10-year yield closed at 1.75 percent today, according to Department of the Treasury data.
