As fixed rates on residential loans sank to the lowest level since 2012, new mortgage business soared to the highest level in more than a year.
At 197, the U.S. Mortgage Market Index from OpenClose and Mortgage Daily moved up 16 percent compared to one week earlier.
The index, a reflection of average rate locks per OpenClose client, has not been this high since the week ended
March 27,2015, when it was 203.
In the week ended April 10, 2015, the MMI was 173.
Out front of the week-over-week increase were rate locks for jumbo mortgages, which leapt 40 percent from the week ended April 1, 2016. Jumbo activity was down, however, 37 percent from
this week last year. Jumbo share widened to 6.6 percent from 5.5 percent in the last report but was much thinner than 11.9 percent from a year ago.
Interest rates on jumbo mortgages were 3 basis points lower than conforming rates. The jumbo-conforming spread narrowed from a negative 5 BPS a week earlier and swung from a positive 9 BPS a year earlier.
Adjustable-rate mortgage business picked up 29 percent and was 5 percent stronger than a year previous. ARM share was fatter at 8.8 percent versus 8.0 percent in the previous report and 9.6 percent in the year-earlier report.
After that were rate locks for loans insured by the Federal Housing Administration, which rose 22 percent. FHA business was up by more than half from the same week in 2015 — the biggest year-over-year gain. FHA share climbed to 26.0 percent from 24.7 percent and was much wider than 19.6 percent a year ago.
Conventional business improved by 14 percent and increased 5 percent from a year prior.
The weakest gain from the last report was for refinances: 7 percent. Refinance rate locks, though, were 23 percent stronger than in the report from a year earlier.
Refinance share fell to two-thirds from 71.5 percent but was wider than 61.4 percent a year ago. The latest share was comprised of a 43.1 percent rate-term share and a 23.0 percent cashout share.
Fixed interest rates on conforming 30-year loans came in at 3.59 percent — the lowest they’ve been since the week ended Dec. 28, 2012.
Thirty-year rates were 3.71 percent in the last report and 4.09 percent in the year earlier report.
Rates on 15-year mortgages were 71 BPS lower than 30-year rates. The spread thinned from 73 BPS one week prior and 88 BPS one year prior.
A Mortgage Daily analysis of Treasury market activity points to roughly a three-basis-point decline in fixed rates in the next Mortgage Market Index report.
