Even though there was a modest improvement in rates, new mortgage business slowed this past week. Still, activity was solidly stronger than it was at this point last year.
At 174 in the week ended Aug. 19, the U.S. Mortgage Market Index from OpenClose and Mortgage Daily retreated 6 percent from the report issued a week prior.
The index is a representation of the average number of rate locks submitted per user by
customers of OpenClose during the seven days ended on Thursday at midnight.
Compared to the same week last year, the MMI , which provides an early indication of upcoming mortgage originations, surged ahead by 55 percent.
The week-over-week decline was led by jumbo activity, with the Jumbo MMI tumbling 23 percent to 13. Jumbo business, however, was up 19 percent versus a year ago.
Jumbo share was trimmed to 7.5 percent from 9.1 percent a week earlier and 9.7 percent a year earlier.
Rates this week on jumbo mortgages were 10 basis points more than conforming rates. The jumbo-conforming spread was hardly different than in the week ended Aug. 12 but swung from a negative 25 BPS this week in 2015.
An 11 percent decline from the last report was recorded for the Government MMI, which came in at 56.
Government share thinned to 32.1 percent from 34.0 percent one week previous. This week’s share consisted of a 23.7 percent FHA share and an 8.4 percent VA share.
Refinance business slowed by 8 percent, leaving the Refinance MMI at 74. But a 116 percent surge was observed from the revised level a year ago.
Refinance share thinned to 42.7 percent from 43.8 percent but was far wider than the revised 30.6 percent in the report from 12 months prior. The most-recent share was comprised of a 27.5 percent rate-term share and a 15.2 percent cashout share.
Next up were rate locks for purchase financing, with the Purchase MMI slipping 4 percent to 100. But purchase business rose 28 percent from the revised level the same week last year.
Rate locks for conventional mortgages dipped 3 percent from the last report, putting the Conventional MMI at 118 this week.
The only index to see a week-over-week gain was the ARM MMI, inching up 2 percent to 13. Rate locks for adjustable-rate mortgages, though, were off 3 percent on a year-over-year basis. ARM share increased to 7.3 percent from 6.7 percent but was sliced from 11.6 percent in the same week last year.
ARM activity increased despite that 30-year conforming fixed rates averaged 3.43 percent in the latest report, 2 BPS better than last week and sinking 50 BPS from 52 weeks ago.
The spread between 15- and 30-year mortgages was unchanged from the last report at 69 BPS but fell from 78 BPS the same week in 2015.
Based on a Mortgage Daily analysis of Treasury market activity,
fixed rates on home loans are likely to be around 5 BPS higher in the next MMI report.
