A holiday week and an increase in interest rates helped pull down overall new mortgage activity during the latest seven-day period. Jumbo business took the biggest hit.
At 118 for the week ended Oct. 16, the U.S. Mortgage Market Index from OpenClose and Mortgage Daily was down 16 percent from the previous week.
The index, which reflects average per-user rate locks by clients of OpenClose, has plummeted by more than half compared to the same week last year.
While there is no seasonal adjustment to the index, year-prior numbers were revised to reflect statistics from the same data provider.
Leading the index lower were rate locks for jumbo mortgages, which retreated 21 percent from the week ended Oct. 9. Jumbo business dove 56 percent on a year-over-year basis — the most severe decline of any category from a year previous.
Jumbo activity accounted for 10.6 percent of all business in the latest report. Jumbo share
thinned from 11.2 percent a week earlier and 11.7 percent a year earlier.
Rates on jumbo mortgages were 15 basis points less than on their conforming counterparts. The jumbo-conforming spread widened from a negative 12 BPS in the last report and a negative five BPS in the year-previous report.
Next up were refinances, with rate locks down by a fifth for the week and off 48 percent from the week ended Oct. 17, 2014. Refinance share narrowed to 65.4 percent from 68.2 percent but was wider than 62.1 percent 12 months ago. This week’s share reflected a 44.8 percent rate-term share and a 20.6 percent cashout share.
Adjustable-rate mortgage activity slid 18 percent on a week-over-week basis and has fallen 54 percent on a year-over-year basis. ARM share thinned to 11.2 percent from 11.5 percent and was also more narrow than 11.9 percent one year prior.
A 17 percent decline from the last report was recorded for conventional business, while the category was down 55 percent from the same week last year.
After that were rate locks for purchase financing, which retreated 16 percent from last week. Purchase activity has fallen 41 percent from 12 months ago.
The smallest week-over-week drop was with mortgages insured by the Federal Housing Administration, which were off 13 percent for the week and 16 percent lower than one year previous. FHA share was 19.4 percent, wider than 18.7 percent in the last report and 11.3 percent this week last year.
Fixed rates on 30-year conforming mortgages averaged 3.82 percent, six BPS worse than in the last report. But 30-year rates have fallen 47 BPS from the year-earlier report.
Fifteen-year rates were 79 BPS less than 30-year rates. The spread widened from 77 BPS a week earlier but narrowed from 91 BPS a year earlier.
Mortgage Daily’s analysis of Treasury market activity suggests that fixed rates will be roughly the same in the next Mortgage Market Index report.
