Weekly mortgage activity slowed, and government-insured business led the downturn. Although adjustable-rate business picked up, that could change from a sharp daily drop in rates.
The U.S. Mortgage Market Index from Mortgage Daily, a reflection of average per-user rate locks registered by clients of OpenClose, closed out the week ended Dec. 11 at 127.
Compared to one week previous, the index was seven percent lower. An even bigger retreat was recorded versus one year previous, with a 28 percent year-over-year decline reported.
Year-earlier figures were revised to reflect statistics from the same data provider.
A nine percent decline from the week ended Dec. 4 hit rate locks for mortgages insured
by the Federal Housing Administration. FHA business, however, has increased by 21 percent from the same week in 2015. FHA share slipped to 23.3 percent from 23.9 percent but was far wider than 13.9 percent 12 months previous.
The Purchase MMI was 56, off eight percent for the week and 23 percent less than in the week ended Dec. 12, 2014.
At 10, the Jumbo MMI was seven percent less than a week earlier and 51 percent worse than a year earlier. Jumbo activity accounted for 7.6 percent of all rate locks, the same as in the prior report but less than the 11.1 percent as of one year prior.
The jumbo-conforming spread fell to a negative 16 basis points from a negative 21 BPS and swung from a positive eight BPS in the year-earlier period.
Conventional business fell six percent for the week and tumbled 36 percent for the year.
Rate locks for refinances were off two percent from the last report and down five percent from 12 months previous. Refinance share moved up to 76.7 percent from 72.8 percent and was also wider than 58.4 percent 12 months ago. Refinance share was made up of a 47.3 percent rate-term share and a 29.4 percent cashout share.
Adjustable-rate mortgage business was the only category to strengthen, with the ARM MMI climbing six percent from seven days prior. Still, ARM activity was off 11 percent from this week last year. ARM share rose to 13.5 percent from 11.9 percent and was also wider than 10.9 percent a year ago.
Hurting the latest activity were interest rates on home loans, with 30-year conforming fixed rates averaging 3.95 percent, up two BPS from the previous week but 32 BPS better than a year previous.
Fifteen-year rates were 76 BPS less than 30-year rates. The spread narrowed from 77 BPS in the last report and 83 BPS this week last year.
As the Dow Jones Industrial Average sank more than 250 points Friday and crude oil fell below $36 a barrel, the yield on the 10-year Treasury note sank. Mortgage Daily’s analysis of Treasury market activity suggests that fixed rates could be around 11 BPS less in the next Mortgage Market Index report.
