A third consecutive week of rate declines helped nudge up new mortgage activity for the second week in a row. Refinance business moved up the most.
In the week that ended on Oct. 9, the U.S. Mortgage Market Index from OpenClose and Mortgage Daily came in at 141.
The index is determined based on average per-user rate locks submitted by clients of OpenClose during the seven days ended Thursday.
Compared to the previous week, the index was up two percent.
But activity slowed by nearly a quarter versus the same week last year. Year-earlier figures were revised to reflect statistics from the same data provider.
Out front of the latest rise were rate locks for conventional mortgages, which rose nearly four percent from
the week ended Oct. 2. Conventional business, however, retreated 29 percent from the same week a year prior.
Refinance activity, which tends to move in tandem with the conventional
category, was also up almost four percent. A six percent year-over-year decline was recorded for refinances.
Refinance share widened to 68.2 percent from 67.1 percent and has fattened from 55.1 percent in the week ended Oct. 10, 2014. This week’s refinance share was comprised of a 45.2 percent rate-term share and a 23.0 percent cashout share.
Next were rate locks for purchase financing, though the category was hardly higher than in the last report. Purchase business has slowed 23 percent from a year ago.
Jumbo business was off two percent versus the prior week and has retreated 31 percent from a year prior — the biggest decline on a year-over-year basis. Jumbo share slipped to 11.2 percent from 11.7 percent a week earlier and fell from 12.4 percent a year earlier.
Interest rates on jumbo mortgages were 12 basis points less than on conforming loans. The jumbo-conforming spread narrowed from a negative 27 BPS in the last report
but was virtually unchanged from the year-prior report.
A five percent decline from last week was recorded for rate locks on mortgages insured by the Federal Housing Administration.
Compared to this week in 2014, FHA business has risen by more than seven percent. FHA share thinned to 18.7 percent from 20.1 percent but was wider than 13.3 percent in the same week last year.
The worst-performing category versus seven days previous was the adjustable-rate mortgage category, with ARM rate locks dropping eight percent. ARM business has slowed 29 percent over the past 12 months. ARM share fell to 11.5 percent from 12.8 percent a week prior and 12.3 percent a year prior.
Helping to lift new business were interest rates, with average fixed rates on 30-year mortgages declining nine BPS over the past seven days to 3.76 percent. Thirty-year rates were 65 BPS better than in the same week last year.
Fifteen-year mortgages had rates that were 77 BPS lower than 30-year loans, less than the 78-basis-point spread last week. The spread was also less than 90 BPS one year ago.
An analysis of Treasury market activity by Mortgage Daily points to fixed rates that might be roughly four BPS worse in the next Mortgage Market Index report.
