As interest rates inched lower this past week, overall new mortgage activity inched higher. The increase in activity, however, was more substantial for adjustable-rate mortgages.
The U.S. Mortgage Market Index from Mortgage Daily, a reflection of average per-user rate locks by clients of OpenClose, finished the week ended Oct. 2 at 138.
Compared to a week earlier, the index — an indicator of upcoming originations — was up two percent. But activity has slowed by 20 percent versus the same week last year.
The year-earlier figures were revised to reflect statistics from the same data provider.
Leading the week-over-week gain were rate locks for ARMs, which shot up 24 percent from the week ended Sept. 25. ARM business, however, has retreated 17 percent from a year previous. ARM share widened to 12.8 percent from 10.5 percent in the prior report and 12.3 percent in the year-earlier report.
Next up was the eight percent increase in activity on loans insured by the Federal Housing Administration. FHA business accelerated 11 percent from the week ended Oct. 3, 2014 — the largest year-over-year gain. More than a fifth of all business this week was FHA, up from a share of 19.0 percent seven days earlier and 14.6 percent 12 months earlier.
A four percent increase was recorded for purchase financing, though the category tumbled 24 percent from the same week in 2014.
Rate locks for conventional mortgages inched up less than a percent for the week and were down nearly a quarter for the year — the worst year-over-year decline.
Jumbo mortgage business fell seven percent from the prior week and was down 21 percent from the same week in the prior year. Jumbo share diminished to 11.7 percent from 12.8 percent and was also thinner than 11.9 percent a year ago.
The decline in jumbo activity contrasted jumbo mortgage rates, which were 27 BPS lower than conforming rates — better than the negative 17-basis-point jumbo-conforming spread as of the prior week and the negative 12-basis-point spread in place as of this week last year.
Refinances had the worst performance versus the previous report, with rate locks for refinance transactions retreating eight percent. But refinance business has strengthened by five percent from the same week in 2014.
Refinance share was slashed to 67.1 percent from 74.2 percent in the last report. But the share was fatter than 51.2 percent in the year-earlier report. The most-recent share consisted of a 43.4 percent rate-term share and a 23.7 percent cashout share.
Thirty-year conforming fixed rates averaged 3.85 percent, a basis point less than a week prior. Thirty-year rates have tumbled 64 BPS from one year ago.
There was a 78-basis-point spread between 15- and 30-year rates, no different than in the last report. But the spread has declined from a year previous, when 15-year rates were 90 BPS better than 30-year rates.
Fixed rates will probably be around
12 BPS better in the next Mortgage Market Index report based on an analysis of Treasury market activity by Mortgage Daily. Bond yields tumbled today following a weak employment report for September.
