As mortgage rates plunged this past week, jumbo loan and adjustable-rate mortgage activity shot up — helping to drive up overall business.
The U.S. Mortgage Market Index from OpenClose and Mortgage Daily for the week ended Aug. 28 landed at 144.
Compared to the previous week the index, a reflection of average per-user rate locks by OpenClose clients, soared 28 percent.
But the index has declined eight percent from the same week in 2015. Year-earlier figures were revised to reflect statistics from the same data provider.
Jumbo business led the improvement, spiking 72 percent from a week earlier. Jumbo rate locks were seven percent higher than a year ago. Jumbo share widened to 13.0 percent from 9.7 percent and was 11.1 percent a year earlier.
Rates on jumbo mortgages were 28 basis points less than on conforming rates. The jumbo-conforming spread widened from a negative 25 BPS in the previous report and
a negative five BPS in the year earlier report.
Rate locks for ARMs soared by half versus the week ended Aug. 21. ARM activity was up eight percent from 12 months prior. ARM share widened to 13.6 percent from 11.6 percent a week earlier and 11.5 percent a year earlier.
Next up was refinance business, which accelerated 37 percent from the last report and has increased by a third from the week ended Aug. 29, 2014. Refinance share expanded to 70.9 percent from two-thirds and also increased from just under half in the same week in 2014. The latest share consisted of a 44.0 percent rate-term share and a 27.0 percent cashout share.
Rate locks for conventional loans rose 29 percent on a week-over-week basis but fell 13 percent on a year-over-year basis.
After that were locks for mortgages insured by the Federal Housing Administration, which were up by a quarter from the last report. FHA business has grown 17 percent from 12 months prior. FHA share slipped to 19.5 percent from 20.0 percent
but was wider than 15.2 percent 12 months ago.
Rate locks for purchase financing strengthened 24 percent, though the category slowed 17 percent from this week last year.
Conforming 30-year fixed rates averaged 3.84 percent, tumbling nine BPS from one week prior and 63 BPS from one year prior.
Fifteen-year mortgage rates were 78 BPS less than 30-year rates, the same spread as the previous week. But the spread has thinned considerably from 12 months previous, when it stood at 96 BPS.
Fixed rates could be in the neighborhood of seven basis points worse in the next report based on a Mortgage Daily analysis of Treasury market activity.
