The government shutdown and reopening had little impact on new mortgage business this week. But interest rates were slightly higher, though they could decline by the next report.
The U.S. Mortgage Market Index from LoanSifter and Mortgage Daily closed out this week at 176. The index reflects average per-user pricing inquiries at LoanSifter, a pricing engine.
Business slipped 1 percent from seven days earlier and tumbled 37 percent from 12 months ago. Year-earlier statistics were revised to reflect numbers from the same data provider.
Likely reflecting the government shutdown, inquiries for mortgages insured by the Federal Housing Administration took the biggest hit for the week ended Oct. 18, falling 3 percent from the previous report. FHAÂ business has plunged 41 percent from the same week in 2012.
FHAÂ share drifted down to 15.1 percent from 15.4 percent in the week ended Oct. 11 and declined 16.0 percent from one year prior.
The next biggest hit was with jumbo loans, with inquiries falling more than 1 percent from a week earlier. But jumbo activity has increased 18 percent from a year earlier. Jumbo share was little changed on a week-over-week basis at 7.6 percent but has soared from 4.0 percent in the week ended Oct. 19, 2012.
Jumbo mortgages were priced at a 32-basis-point premium to conforming loans. The jumbo-conforming spread was little changed from 31 BPS in the prior report but much better than the 48-basis-point spread during the same week in the prior year.
A decline of slightly more than 1 percent was recorded for refinances, though the category plummeted 59 percent from the same week last year — the worst year-over-year performance.
Refinance share was about the same as in the previous report at 50.9 percent but has retreated significantly from 77.3 percent 12 months ago. This week’s share consisted of a 36.9 percent rate-term share and a 14.0 percent cashout share.
Inquiries for purchase financing were off less than 1 percent for the week, though purchase business has increased 36 percent on a year-over-year basis.
Statistically, there was no change from last week for conventional loans, though conventional inquiries have tumbled 42 percent over the past year.
The only category to record a gain, albeit ever so slightly, was the adjustable-rate mortgage category — which inched up 1 percent from seven days prior. ARM activity has soared 80 percent from 12 months prior — the biggest gain of any loan type.
Thirty-year conventional fixed rates averaged 4.524 percent, barely changed from last week’s 4.523 percent. But the 30 year was up 91Â BPS from the same week in 2012.
Price quotes for 15-year mortgages were 92 BPS less than for 30-year loans, improving from the 90-basis-point spread in the previous report and far better than the 63-basis-point discount for shorter-term loans in the year-earlier report.
Fixed mortgage rates can be expected to be around 6 BPS better in next week’s report based on an analysis of this week’s Treasury market activity.
The yield on the 10-year Treasury note averaged 2.66 percent during the week covered by the latest Mortgage Market Index, while it closed at 2.60 percent Friday, according to Treasury Department data.
