| PRESSÂ RELEASE
Purchase Financing Tumbles Despite Plunging Mortgage Rates DALLAS — (June 4, 2012) With purchase financing and adjustable-rate business leading the way, mortgage activity dropped during the holiday week. Meanwhile, mortgage rates continued their descent to depths not previously seen and are poised to establish even more new records. Loan originators pulled 9 percent fewer pricing inquiries than last week, leaving the U.S. Mortgage Market Index from Mortech Inc. and Mortgage Daily for the week ended June 1 at 199. The index was also lower than a year ago, when it stood at 212. The decline was the result of the Memorial Day holiday. The upcoming longer work week — as well as plummeting mortgage rates — is likely to drive business higher in the next report. Purchase financing took the biggest hit, falling 13 percent from a week earlier. Purchase business was down 40 percent from this week in 2011. As prospective borrowers flocked to record-low fixed rates, fewer opted for adjustable-rate mortgages — with ARM share slipping to 4.05 percent from last week’s 4.16 percent. ARM share was much higher a year earlier at 9.5 percent. ARM activity tumbled 12 percent from last week, and ARM inquiries have plummeted 60 percent over the past 12 months. Inquiries for mortgages insured by the Federal Housing Administration fell 10 percent and were down a quarter from the week ended June 3, 2011. FHA share declined to 20.1 percent from 22.4 percent seven days earlier and a quarter a year earlier. Conventional activity mirrored overall activity, falling 9 percent from the previous report. Conventional business was off 3 percent from this week last year. Eight percent fewer borrowers were out shopping for a refinance this week than last week, though refinance inquiries were up nearly a quarter from a year ago. Refinance share inched up to 70 percent from 69 percent and was 53 percent in the same week a year prior. The latest refinance share reflected a 57 percent rate-term share and a 13 percent cashout share. The best performing category in the most recent report was jumbo, with inquiries for loans in excess of $417,000 off just 7 percent for the week. The difference between jumbo rates and conforming rates deteriorated to 61 basis points from 58 BPS. The jumbo-conforming spread was only 52 BPS in the year-earlier report. The 30-year fixed-rate mortgage continued its trek deeper into record territory, averaging 3.84 percent versus last week’s average of 3.87 percent. The 30 year was 4.65 percent 12 months ago. Borrowers shopping for15-year mortgages were quoted rates that were 73 BPS better than 30-year loans, a little better than the 72-basis-point discount being quoted in the previous report. The spread was 77 BPS a year previous. |
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Historical data for the U.S. Mortgage Market Index is available at: Founded in 1998, MortgageDaily.com is a leading online source of mortgage news and mortgage statistics for the mortgage industry. CONTACT: Source: MortgageDaily.com |
