A retreat in interest rates on home loans had more loan originators locking in mortgage rates, with government-insured and purchase activity driving the gains.
A 15 percent rise from last week’s report put the U.S. Mortgage Market Index from OpenClose and Mortgage Daily at 181 for the week ended June 10.
It was the busiest week for new mortgage activity since the week ended May 6, when the index was 200, and over a third better than in the same week last year.
Year-earlier data for the index, which tracks average per-user rate locks by OpenClose clients during the seven days ended midnight on Thursday, were revised to reflect the same data provider.
A one-third improvement from the week ended June 3 was recorded for Federal Housing Administration activity, the largest of any category, leaving the FHA MMI at 50. Rate locks for FHA-insured loans soared 71 percent on a year-over-year basis. FHA share jumped to 27.7 percent from 23.9 percent in the last report and 21.7 percent in the year-earlier report.
The wider FHA share in the Mortgage Market Index report compared to other industry FHA statistics reflects a bigger government-share among OpenClose users.
Rate locks for adjustable-rate mortgages increased, with the ARM MMI up 17 percent to 14. ARM activity edged up 2 percent from the week ended June 12, 2015, as ARM share widened slightly to 7.9 percent from 7.7 percent a week earlier but thinned from 10.4 percent a year earlier.
A 16 percent week-over-week improvement was note for the Purchase MMI, which was 88. Purchase financing activity has improved by a third from the same week in 2015.
At 115, the Refinance MMI increased by more than 9 percent from the previous report and was up by more than half from the year-earlier report. Refinance share thinned to 63.2 percent from 66.3 percent but widened from 56.2 percent one year ago. The components for this week’s share were a 39.0 percent rate-term share and a 24.2 percent cashout share.
Up nearly 9 percent
from the week ended June 3 was conventional business, which has risen by nearly a quarter on a year-over-year basis.
Jumbo loans were the only mortgages to see a decline in new business, with the Jumbo MMI dropping 28 percent to 9. Jumbo rate locks were 32 percent short of the year-earlier volume. Jumbo share slid to 5.0 percent from 7.9 percent and has been slashed from 9.7 percent this week last year.
Interest rates on jumbo mortgages were 3 basis points more than conforming rates. The jumbo-conforming spread narrowed from 9 BPS the previous week and 10 BPS a year previous.
A 6-basis-point tumble from a week earlier left conforming 30-year fixed rates averaging
3.60 percent. Thirty-year rates averaged 4.37 percent the same week in 2015.
Locks for 15-year borrowers yielded rates that were 73 BPS lower than 30-year rates. The spread thinned from 74 BPS in the last report and 87 BPS in the year-earlier report.
A Mortgage Daily analysis of Treasury market activity suggests that interest rates on residential loans could be around 6 BPS lower in the next Mortgage Market Index report.
