Elevated mortgage rates sent new refinance business down more than a quarter this week, while the declines were more moderate for purchase and government inquiries. But some easing could be ahead for mortgage rates.
Pricing inquiries for prospective mortgage borrowers declined 21 percent this week. Activity was down 23 percent compared to this week last year.
The weekly performance statistics were based on the U.S. Mortgage Market Index from Mortech Inc. and MortgageDaily.com, which was 255 for the week ended Oct. 14. Last week’s index was 321.
Refinance inquiries dropped 27 percent over the past seven days and were 21 percent lower than last year at this time.
The refinance share was 65 percent, down from 71 percent in last Friday’s report. There wasn’t much change from the 63 percent total refinance share during the same week in 2010. This week’s refinance share was made up of a 51 percent rate-term share and a 14 percent cashout share.
Pricing inquiries for loans to finance home purchases were off 5 percent from last week, though purchase activity was down more than a quarter from a year earlier.
Conventional activity tumbled 22 percent from last week, but Federal Housing Administration inquiries were down just 7 percent.
The conforming 30-year fixed-rate mortgage was priced at 4.35 percent in this week’s report, up 25 basis points from a week earlier and 23 BPS higher than a year earlier.
The premium charged for jumbo mortgages was 67 BPS, better than the 74-basis-point premium being charged a week ago. The jumbo-conforming spread was 95 BPS at this point last year.
Fifteen-year borrowers paid 65 BPS less than 30-year borrowers this week, improving from the 59-basis-point discount last week.
While the 30-year mortgage was up 25 BPS from last Friday’s report, the yield on the 10-year Treasury note was up just 16 BPS during the same period to close today at 2.26 percent based on Department of the Treasury data. That leaves room for a 10-basis-point improvement in next week’s report given no other significant market news.
