Moving into the holiday weekend, new mortgage business turned sharply lower. After surging in the previous report, jumbo lending activity plummeted.
An indication of upcoming originations, the U.S Mortgage Market Index from Mortgage Daily and OpenClose, was 113 in the week ended Dec. 23.
The index, which is not adjusted for seasonal factors, tumbled 26 percent from a week earlier. But compared to the same week last year, it was up 3 percent.
The MMI is determined based on average per-user rate locks by OpenClose clients.
Leading the week-over-week drop were rate locks for jumbo mortgages, with the Jumbo MMI sinking 52 percent from the week ended Dec. 16 — when it surged 52 percent higher. Jumbo activity declined 35 percent from the same week last year. Jumbo share thinned to 4.8 percent from 7.3 percent and was also more narrow than 7.5 percent twelve months earlier.
Interest rates on jumbo mortgages were the same as conforming rates. In the last report, jumbo rates were 7 basis points more than conforming rates, while they were 15 BPS less than conforming rates in the year-earlier report.
The Refinance MMI fell 31 percent on a week-over-week basis, though it was up 11 percent from the downwardly revised level on a year-over-year basis. Refinance share was cut to 35.7 percent from 38.1 percent but was still wider than the downwardly revised 33.1 percent this week in 2015. This week’s share was comprised of a 17.9 percent rate-term share and a 17.8 percent cashout share.
Conventional business retreated 29 percent from last week, placing the Conventional MMI at 70.
Rate locks for purchase financing fell 24 percent, leaving the Purchase MMI at 73. Purchase activity dipped 1 percent from the upwardly revised level in the week ended Dec. 25, 2015.
The Government MMI fell 22 percent from the report seven days previous, finishing the week at 43. Government share widened to 38.3 percent from 36.0 percent. This week’s share consisted of a 28.2 percent FHA share and a 10.1 percent VA share.
Adjustable-rate mortgages had the best week-over-week performance, falling just 11 percent. ARM activity was off 18 percent from the same seven-day period in 2015. ARM share widened to 9.5 percent from 7.8 percent but was still thinner than 11.8 percent twelve months ago.
