An increase in refinance activity more than offset a week-over-week slump in purchase financing as prospective refinance borrowers rushed to lock in their rates.
A 1 percent escalation from previous week left the U.S. Mortgage Market Index from OpenClose and Mortgage Daily at 161 for the week ended Nov. 4.
Compared to the same week last year, the index — an indication of upcoming originations based on average rate locks by OpenClose users — soared 36 percent.
A 28 percent increase from the week ended Oct. 28 was recorded for jumbo rate locks, putting the Jumbo MMI at 15. There was no change in jumbo activity from the same week last year. Jumbo business accounted for 9.4 percent of all rate locks. Jumbo share widened from 7.4 percent in the last report but thinned from 12.7 percent in the same report last year.
The jumbo-conforming spread contracted to 2 basis points from 7 basis points and swung from a negative 15 BPS this week in 2015.
The Refinance MMI ascended 11 percent for the week
to 71. The acceleration in refinance activity came as 30-year fixed rates jumped 7 BPS this week. Such behavior is typical in a rising rate environment as borrowers rush to lock in before rates potentially increase further.
Refinance business has increased 79 percent from the downwardly revised level in the week ended Nov. 6, 2015. Refinance share widened to 44.0 percent from 40.1 percent a week earlier and a downwardly revised 33.5 percent a year earlier. This week’s share consisted of a 28.9 percent rate-term share and a 15.0 percent cashout share.
Rate locks for government mortgages increased 4 percent from one week previous, placing the Government MMI at 56. Government share widened to 35.0 percent from 34.2 percent and was comprised of a 26.1 percent FHA share and an 8.9 percent VA share.
A less than 1 percent week-over-week increase in rate locks was recorded for conventional mortgages.
A 2 percent decline from the last report was recorded for rate locks for adjustable-rate mortgages. ARM business slowed by 18 percent versus this week last year. ARM share, meanwhile, was trimmed to 6.9 percent from 7.2 percent and was slashed from 11.5 percent a year ago.
The worst-performing index — the Purchase MMI — fell 5 percent from the prior week to 90. Still, purchase activity has improved 15 percent from the upwardly revised level 12 months ago.
