Preliminary residential lending activity was busier this past week, and it was the jumbo mortgage sector that was out front of the week-over-week gain.
The U.S. Mortgage Market Index from OpenClose and Mortgage Daily, an indicator of upcoming mortgage closings, was 135 in the week ended Jan. 22.
Compared to one week earlier, the index — which moves based on average per-user rate locks submitted by OpenClose clients — has ascended five percent.
The improvement in activity is more impressive considering that the latest index, which wasn’t adjusted for any seasonal variations,
included the Martin Luther King Jr. holiday.
Business has tumbled, however, 45 percent from a year earlier. The prior year’s numbers have been revised to reflect figures from the same data provider.
The Jumbo MMI was 15, surging 40 percent ahead of the previous week. Jumbo activity slowed, though, 39 percent from the week ended Jan. 23, 2015. Eleven percent of all rate locks were for jumbo mortgages. Jumbo share widened from 8.3 percent the previous week and 9.9 percent in the year-previous week.
Interest rates on jumbo loans were a quarter percent better than on conforming loans, widening from a negative jumbo-conforming spread of 23 BPS in the prior report. The spread swung from a positive 19 BPS a year previous.
A week-over-week boost was noted for purchase financing, with rate locks increasing eight percent from the week ended Jan. 15, 2016. Purchase activity has slowed, however, 23 percent on a year-over-year basis.
Rate locks for conventional loans made a five percent week-over-week gain but slowed by nearly half from the same week last year.
A four percent rise was recorded for rate locks on loans insured by the Federal Housing Administration. FHA business was off by a quarter from the year-earlier report. FHA share was unchanged at 22.6 percent but was fatter than 16.6 percent this week in 2015.
Despite an 11-basis-point improvement in
average 30-year fixed rates, refinance business slowed five percent and was down 43 percent for the year.
Refinance share tumbled to 69.3 percent from 76.6 percent but was slightly more wide than 67.7 percent a year prior. The most-recent share consisted of a 45.4 percent rate-term share and 23.8 percent cashout share.
The biggest loss from last week in any category was for rate locks on adjustable-rate mortgages: 11 percent. The category was down 48 percent from the same week last year. ARM share fell to 8.6 percent from 10.1 percent and was also down from 9.1 percent 52 weeks earlier.
Thirty-year fixed rates averaged 3.81 percent on conforming loans — the lowest rate since the week ended Oct. 30, 2015; down from 3.92 percent in the last report; and declining from 4.024 percent in the year-earlier report.
Fifteen-year mortgages were priced 71 BPS better than 30-year loans. The spread thinned from 73 BPS a week earlier and
82 BPS a year earlier.
Fixed mortgage rates could be approximately four BPS higher in the next Mortgage Market Index report based on a Treasury market analysis by Mortgage Daily.
