New mortgage activity moved higher following the holiday week, with jumbo business up by nearly half and purchase financing climbing nearly a third.
At 140, the U.S. Mortgage Market Index from OpenClose and Mortgage Daily was up 11 percent compared to one week previous.
Compared to one year previous, the index — a reflection of average per-user rate locks by OpenClose-clients — has retreated 13 percent.
“Coming off two straight weeks of declines, it’s good to see a strong rebound this week led by a significant gain in purchase activity,” OpenClose Senior Vice President National Sales & Strategy Vincent E. Furey III said in a written statement, “once again demonstrating the historical seasonality of end-of-summer production and our industry resilience kicking in post-Labor Day.”
Leading the index higher were rate locks for jumbo mortgages, which soared 48 percent from the week ended Sept. 11. Jumbo business was four percent better than the same week last year. Nearly 13.7 percent of all rate locks this week were for jumbo mortgages, more than the 10.2 percent jumbo share in the previous report and 11.4 percent share in the year-earlier report.
Interest rates on jumbo mortgages were 22 basis points less than on conforming loans. The jumbo-conforming spread thinned from a negative 24 BPS a week earlier but was substantially wider than a negative four BPS a year earlier.
Purchase financing business shot up 32 percent from the last report, though the category remains down 19 percent compared to this week last year.
Next up were rate locks for loans insured by the Federal Housing Administration, which ascended more than 11 percent from seven days prior and were up six percent from the week ended Sept. 19, 2014. FHA share was unchanged at 18.4 percent but was bolstered from 15.2 percent a year ago.
After that was conventional business, with the category gaining nearly 11 percent on a week-over-week basis but retreating 16 percent on a year-over-year basis.
Rate locks for adjustable-rate mortgages climbed eight percent from a week earlier but fell 14 percent from a year earlier. ARM share slipped to 11.8 percent from 12.1 percent and was also down from 11.9 percent the same week in 2014.
The smallest gain from the last report was with refinances, which were up seven percent. But refinances had the biggest increase from a year prior: 11 percent.
Refinance share fell to 59.8 percent from 61.9 percent but fattened from 47.0 percent 12 months ago. Refinance share was comprised of a 37.4 percent rate-term share and a 22.4 percent cashout share.
Mortgage activity improved despite a one-basis-point up tick in 30-year fixed rates to 3.91 percent. But rates have receded 64 BPS compared to this week last year.
Locks for 15-year mortgages yielded rates that were 80 BPS lower than on 30-year loans, no different than last week. The spread was down from 87 BPS one year prior.
Interest rates on residential loans are poised to drop approximately eight BPS in the next report based on Mortgage Daily’s analysis of Treasury market activity.
