An improvement in the interest rates charged on home loans had existing borrowers rushing to lock in lower rates on prospective refinances.
For the week that ended on Jan. 15, the U.S. Mortgage Market Index from OpenClose and Mortgage Daily came in at 130.
It was an 18 percent increase from one week earlier for the index, a reflection of average per-user rate locks submitted by OpenClose users.
But activity was down by more than half from the same week in 2015. Year-earlier figures have been revised to reflect statistics from the same provider of data.
Refinances led the week-over-week improvement, with the Refinance MMI surging 27 percent from the week ended Jan. 8. But refinance rate locks retreated 47 percent from a year earlier.
Refinance share expanded to 76.6 percent from 71.0 percent the prior week and 69.5 percent the year-earlier week. The latest share consisted of a 48.9 percent rate-term share and a 27.8 percent cashout share.
A 26 percent week-over-week increase was recorded for jumbo business, though the category collapsed 62 percent from the week ended Jan. 16, 2015 — the worst of any category versus the prior-year period. Jumbo share widened to 8.3 percent from
7.7 percent one week prior but was thinner than 10.4 percent one year prior.
Rate locks on jumbo mortgages were an average of 23 basis points lower than on conforming loans. The jumbo-conforming spread was much fatter than a negative 17 BPS the previous week and swung from a positive 15-basis-point spread the same week in the previous year.
At 100, the Conventional MMI was 19 percent higher than where it stood seven days earlier. The category has plunged, however, 57 percent from the same week in 2015.
The report indicated that rate locks for mortgages insured by the Federal Housing Administration accelerated 12 percent on a week-over-week basis but slipped 24 percent on a year-over-year basis. FHA share thinned to 22.6 percent from 23.7 percent but was wider than 14.1 percent the same week in 2015.
Rate locks for purchase financing were up 13 percent from the last report but down by nearly a third from the year-earlier report.
The only category to experience week-over-week deterioration was the adjustable-rate mortgage category, with ARM activity easing eight percent. ARM business was down by nearly half on a year-over-year basis.
Overall activity ascended with the help of interest rates, as 30-year fixed rates fell five BPS to 3.92 percent.
The 30 year was nine BPS better than 12 months ago.
Rate locks for 15-year mortgages averaged 73 BPS less than for 30-year loans. The spread widened from 71 BPS but fell short of the 84 BPS one year ago.
A Mortgage Daily analysis of Treasury market activity indicates that fixed rates could be around nine BPS lower in the next Mortgage Market Index report.
