New mortgage activity slowed as expected during the holiday week, and it was government-insured and jumbo business that led the decline.
The U.S. Mortgage Market Index from LoanSifter/Optimal Blue and Mortgage Daily landed at 128 for the week ended May 29.
The index — a measure of average product-and-pricing inquiries by clients of LoanSifter — tumbled 13 percent from the previous week and was down by more than a fifth from the same week last year.
Leading the week-over-week decline were inquiries for loans insured by the Federal Housing Administration, with FHA activity sinking 16 percent from the week ended May 22. Compared to a 12 months prior, however, FHA business
was up 5 percent — making it the only category with a year-over-year gain.
FHA share slipped to 19.3 percent from 20.1 percent a week earlier but fattened from 14.2 percent a year earlier.
Next were inquiries for jumbo mortgages, which retreated 15 percent from the prior report
and were down 22 percent from the week ended May 30, 2014. Jumbo share dipped to 10.3 percent from 10.6 percent but inched up from 10.2 percent the same week in 2014.
Interest rates on jumbo loans were 18 basis points higher than on conforming loans. The jumbo-conforming spread widened from 17 BPS seven days earlier. Twelve months earlier, the spread was inverted at a negative 8 BPS.
Purchase financing fell 14 percent and has diminished by nearly a third compared to one year prior.
A 12 percent week-over-week decline was recorded for refinances, while the year-over-year drop worked out to 13 percent. Refinance share rose to 54.4 percent from 53.8 percent in the previous report and 48.5 percent in the same week the previous year. The most-recent share consisted of a 37.2 percent rate-term share and a 17.2 percent cashout share.
Inquiries for adjustable-rate mortgages retreated more than 10 percent from the last report and plummeted 41 from the same week last year — the worst year-over-year performance of any category. ARM share increased to 9.3 percent from 9.0 percent but has contracted from 12.2 percent this week in 2014.
A nearly 10 percent decline from the prior week was recorded for the conventional category, and the year-over-year drop was 29 percent.
Mortgage activity slowed despite an improvement in rates on home loans, with conforming 30-year fixed rates trimming 2 BPS off of the prior report’s average to 4.188 percent. Thirty-year rates have fallen 27 BPS from a year previous.
The difference between 15- and 30-year rates was 87 BPS, narrowing slightly from 88 BPS in the last report. The spread was way down from 98 BPS one year prior.
Little change in fixed mortgage rates is likely by the time the next Mortgage Market Index report rolls around, according to Mortgage Daily’s analysis of Treasury market activity.
