Loan originators were a little less busy this week as interest rates moved higher. The hardest-hit categories were adjustable-rate mortgages and refinances. Mortgage rates look to be headed higher.
A 9 percent decline from last week left the U.S. Mortgage Market Index from LoanSifter and Mortgage Daily for the week ended May 10 at 276. But despite the week-over-week loss, new mortgage activity was up 23 percent from the same week in 2012.
The biggest weekly decline was with ARM pricing inquiries, which fell 14 percent from the week ended May 3. ARM activity has tumbled by half from a year earlier.
ARM share was 4.2 percent, down from 4.5 percent in the prior report.
The next biggest mover was the refinance category, which fell 12 percent from seven days prior. Refinances were up 15 percent from the week ended May 11, 2012.
Refinance share moved down to 68.6 percent from 71.2 percent last week and 69.0 percent in the same week last year. This week’s share consisted of a 55.5 percent rate-term share and a 13.1 percent cashout share.
Jumbo mortgage activity fell 11 percent but rose 7 percent from the year-earlier period. Jumbo movement reflected a 5.5 percent jumbo share, off from 5.6 percent seven days earlier and 6.3 percent a year earlier.
Jumbo mortgages were priced at a 31-basis-point premium over conforming loans. The jumbo-conforming spread improved from 33 BPS in the prior report and 43 BPS in the same week during the prior year.
A 10 percent decline was recorded for conventional loan activity. But conventional business was up 22 percent on a year-over-year basis.
Pricing inquiries for mortgages insured by the Federal Housing Administration slipped 4 percent for the week but were 11 percent stronger than a year ago. FHA share was 13.7 percent, up from 13.0 percent the previous week. FHAÂ share has fallen from 15.2 percent in the same week during 2012.
Purchase financing activity was barely changed from the previous report but has risen 13 percent over the past year.
Mortgage rates moved up 9 BPS, with the 30-year, fixed-rate mortgage averaging 3.728 percent this week. The 30 year was 4.066 percent in the same week last year.
A discount of 77 BPS for 15-year mortgages was better than the 75-basis-point spread last week. The spread between 15- and 30-year mortgages was 77 BPS a year ago.
Mortgage rates are poised to jump again in the next Mortgage Market Index report based on a Mortgage Daily analysis of this week’s Treasury market activity.
The 10-year Treasury yield, a benchmark for fixed mortgage rates, averaged 1.83 percent during the seven days encompassed by this report, according to data reported by the Department of the Treasury. But the 10-year yield surged to 1.90 percent Friday, suggesting that mortgage rates might be around 7 BPS worse in the next report.
