For the fifth consecutive week, new mortgage activity came up short of prior-week business. This week, the decline was aided by reduced inquiries for adjustable-rate mortgages and jumbo loans.
For the week ended May 22, the U.S. Mortgage Market Index from LoanSifter/Optimal Blue and Mortgage Daily was at 146.
The index, which offers insight into average per-user product-and-pricing inquiries, dropped six percent from May 15 weekly mortgage activity. Every week since April 17, mortgage business has steadily recessed on a week-over-week basis.
The index was down more than 21 percent from the week ended May 23, 2014.
ARM business was the worst performing category on a week-over-week and a year-over-year basis. ARM inquiries fell nearly 14 percent from the prior week and almost 45 percent from the same point a year prior.
Unsurprisingly, ARM share shrank to 9.0 percent from 9.9 percent a week ago and 12.9 percent for the week ended May 23 a year ago.
Inquiries on jumbo loans dove 10 percent from the previous week and dropped 21 percent from the same week in 2014. Jumbo loan share thinned to 10.6 percent from 11.1 percent the previous week but was slightly more than the 10.6 percent calculated at the same point last year.
As of May 22, interest rates on jumbo mortgages were almost 17 basis points higher than on conforming loans — just above the 16 BPS reported on May 15. Recent rates had turned around, however, from a negative 10 BPS documented as of last year on May 23.
Refinance inquiries were 5.8 percent below prior week activity and down a tenth from the week ended May 23, 2014.
Refinance share dipped to less than 53.8 percent from more than 53.8 percent seven days ago. Yet the recent share expanded from 46.7 percent for the week that ended May 23 last year. The latest share includes a 17.0 percent cashout share and a 36.8 percent rate-term share.
Conventional mortgage business fell 5.6 percent from the prior week. Recent activity was much worse on a year-over-year basis — stumbling 27 percent from the same date in 2014.
Purchase financing also shrank by 5.6 percent from the prior week and lowered by 32 percent from the same point last year.
Dropping 4 percent from May 15, inquiries on loans insured by the Federal Housing Administration were 1 percent higher than activity during the same week, one year prior. On a year-over-year basis, FHA business was the only performing category to improve.
FHA share grew to 20.1 percent from 19.8 percent for the week ended May 15. On a year-over-year basis, FHA share growth was more evident — increasing from 15.6 percent as of May 23, 2014.
Fixed interest rates on conforming 30-year loans averaged 4.208 percent for the week. This average was two BPS worse than the prior week. Compared to the same point last year, fixed interest rates were 31 BPS lower.
For 15-year mortgages, interest rates were 88 BPS better than rates on 30-year notes. The recent spread was two BPS wider than the week ended May 15. For the same week a year ago, the spread was wider at 101 BPS.
According to a Treasury market activity analysis by Mortgage Daily, fixed rates aren’t likely to be much different in the next report.
