Refis Drag Down Weekly Mortgage Market Index

Refis Drag Down Weekly Mortgage Market Index

DALLAS — (Sept. 24, 2012) As mortgage rates dove to near record-low levels, refinance shoppers were out in droves. Conventional and adjustable-rate activity were both higher, but demand for purchase financing retreated.

The U.S. Mortgage Market Index from Mortech Inc. and Mortgage Daily for the week ended Sept. 21 was 224. The index, which reflects the average number of pricing inquiries pulled by loan originator clients of Mortech, was 7 percent higher than the previous week but off 40 percent from the same week in the previous year.

Much of the most recent week’s strength was in refinance activity, which jumped 11 percent from the week ended Sept. 14. Inquiries for refinancing were down 37 percent, however, from that same week in 2011.

The share of overall activity represented by refinances was 75 percent, growing from 72 percent the prior week and 71 percent in the week ended Sept. 23, 2011. The latest refinance share reflected a 60.6 percent rate-term share and a 14.2 percent cashout share.

An 8 percent increase was recorded for conventional pricing inquiries. But compared to a year prior, conventional business was off 41 percent.

Inquiries for adjustable-rate mortgages climbed 7 percent from the last report but have fallen 71 percent over the past year. ARM share slipped to 2.75 percent from 2.76 percent and was well off of the 5.65 percent share a year prior.

Inquiries for jumbo financing inched up 2 percent for the week. Jumbo mortgages were priced at 69 basis points more than conforming loans, worsening from the 65-basis-point jumbo-conforming spread in the previous report. Jumbo loans were priced at a 71-basis-point premium a year ago.

Mortgages insured by the Federal Housing Administration saw inquiries inch up less than a percent for the week. FHA business was down 30 percent from a year ago. FHA share slipped to 10.3 percent in the latest report from 10.9 percent.

The only category to record a week-over-week decline was purchase financing, which fell 3 percent. Purchase inquiries were down by nearly half from the same week in 2011.

The average 30-year fixed-rate conforming mortgage was priced at 3.580 percent this week, lower than 3.669 percent seven days prior. The 30 year averaged 4.069 percent one year earlier.

The 30-year rate fell to its lowest level on record — 3.554 percent — in the week ended July 27.

The benefit of choosing a 15-year term diminished, with the spread between 15- and 30-year loans narrowing to 64 BPS from 67 BPS in the prior report. Fifteen-year mortgages were priced 72 BPS less than 30-year loans this week last year.