A week-over-week decline in new home-lending activity was driven by purchase and conventional financing, though jumbo business also played a role.
The U.S. Mortgage Market Index from OpenClose and Mortgage Daily for the week ended Aug. 12 was 185, retreating 7 percent from a week prior.
But compared to year prior, the index — which is determined based on average per-user rate locks by OpenClose clients — has risen by nearly a third.
The biggest decline from the week ended Aug. 5, 2016, was with the Jumbo MMI, which dropped 12 percent to 17. Compared to the same week last year, jumbo rate locks have tumbled 27 percent — also the biggest year-over-year decline.
Jumbo business accounted for 9.1 percent of overall activity. Jumbo share was down from 9.6 percent a week earlier and 16.5 percent a year earlier.
Interest rates on jumbo mortgages were 10 basis points more than conforming rates, thinning from an 11-basis-point spread in the last report and swinging from a negative 19-basis-point spread the same week in 2015.
A more than one-tenth drop from the last report was recorded for conventional activity.
Rate locks for purchase financing were off by almost 10 percent compared to the prior report but have risen 4 percent versus the revised Purchase MMI for the week ended Aug. 14, 2015.
A less than 3 percent decline was recorded for the Refinance MMI, though refinance business has soared 105 percent from the revised level a year ago.
Refinance share widened to 43.8 percent from 41.9 percent a week earlier and a revised 28.3 percent a year earlier. This week’s share consisted of a 29.2 percent rate-term share and a 14.6 percent cashout share.
At 63, the Government MMI was barely changed from the last report. Government share widened to 34.0 percent from 31.7 percent the previous week. This week’s share was made up of a 25.1 percent Federal Housing Administration share and a 9.0 percent Department of Veterans Affairs share.
The only category to experience a week-over-week gain was the ARM MMI, with rate locks for adjustable-rate mortgages increasing 13 percent. ARM activity ascended 5 percent from the same week in 2015.
ARM share increased to 6.7 percent from 5.5 percent but has been reduced from 8.5 percent one year ago.
Fixed rates on conforming 30-year mortgages averaged 3.45 percent, up 2 BPS from last week’s report but 49 BPS better than the same week last year.
Rates on 15-year loans were 69 BPS lower than 30-year rates, the same spread as one week prior. The spread was more narrow, though, than 77 BPS one year prior.
Fixed mortgage rates are likely to be around 5 BPS lower in the next Mortgage Market Index report according to a Mortgage Daily analysis of Treasury market activity.
