Rates improved and pushed weekly mortgage activity higher. Refinances were a big beneficiary of falling interest rates this week, but it was jumbo activity that had the best improvement. Market signs point to mortgage rates that are around 10 basis points better in next week’s report.
The average number of pricing inquiries pulled by mortgage originator clients of Mortech Inc. climbed 14 percent from last week, leaving the U.S. Mortgage Market Index from Mortech Inc. and Mortgage Daily for the week ended Nov. 9 at 227. The index was off 6 percent compared to the same week in 2011.
Putting in the best performance were pricing inquiries for jumbo mortgages, which increased 24 percent from the week ended Nov. 2. The share of jumbo activity widened to 8.1 percent from last week’s 7.5 percent. Behind the strength in jumbo business was improved pricing; jumbo mortgages were priced 58 basis points more than their conforming counterparts this week versus the 63-basis-point jumbo-conforming spread in the previous report.
Another strong performer this week was the refinance category, with refinance pricing inquiries rising 17 percent for the week. Refinance business was 9 percent better than the week ended Nov. 11, 2011.
Refinance share widened to 76.2 percent from 74.6 percent a week ago and 65.7 percent a year ago. The most recent refinance share reflected a rate-term share of 61.8 percent and a cashout share of 14.3 percent.
Conventional pricing inquiries increased 16 percent from the prior report but were off 5 percent from this week in the prior year.
Even inquiries for adjustable-rate mortgages were higher, increasing 15 percent from a week earlier but sinking 63 percent from a year earlier. At 2.3 percent, ARM share was mostly unchanged from last week.
Purchase activity was 7 percent busier than last week but off more than a third from this week last year.
The worst-performing category, inquiries for mortgages insured by the Federal Housing Administration, saw a 3 percent gain for the week and a 19 percent loss from a year ago. FHA share slipped to 9.3 percent from 10.3 percent seven days prior.
The spread between 15- and 30-year mortgages narrowed to 67 BPS from 69 BPS in the previous report. But the spread was better than 64 BPS this week during 2011.
The 30-year fixed-rate mortgage averaged 3.515 percent this week, falling from 3.550 percent in the last report. The 30 year was 4.200 percent a year prior.
During the week ended Sept.28, the 30 year fell to 3.411 percent — the lowest level ever recorded for the Mortgage Market Index report.
Lower mortgage rates appear to be on the horizon based on Mortgage Daily’s analysis of Treasury market activity.
The yield on the 10-year Treasury note — a benchmark for mortgage rates — averaged 1.71 percent during the seven days encompassed by this report, according to data from the Department of the Treasury. The 10-year yield closed at just 1.61 percent today.
