With the holidays out of the way, mortgage shoppers were out in droves this week inquiring about new mortgages. Rates are likely to be lower in next week’s report, possibly leading the way for activity to escalate further.
Mortgage inquiries climbed 35 percent from last week, leaving the U.S. Mortgage Market Index from Mortech Inc. and Mortgage Daily for the week ended Jan. 13 at 247.
The index was up 11 percent from the week ended Jan. 12, 2011.
Purchase inquiries saw the biggest improvement, with the purchase index jumping 37 percent over the revised level for the previous week. Purchase activity was down, however, 44 percent from the same week last year.
Refinances, meanwhile, picked up 34 percent from the revised previous report and were up 73 percent compared to a year earlier.
Refinance share was 73 percent this week, about the same as the revised level last week but well above the 53 percent recorded for a year ago.
An adjustment was made this week to the calculation used to determine refinance share. Before the revision, last week’s refinance share was previously reported at 67 percent.
This week’s total refinance share reflected a rate-term refinance share of 60 percent and a cashout refinance share of 13 percent.
Moving on to inquiries for Federal Housing Administration loans, activity increased 36 percent over the past seven days. FHA share edged up to 11.31 percent from 11.22 percent.
Inquiries for conventional loans were 35 percent higher this week.
The number of prospective borrowers out shopping for an adjustable-rate mortgage grew 19 percent from the previous report. ARMs accounted for 4.50 percent of all business, falling from 5.12 percent for the week ended Jan. 6.
The average rate on a conforming 30-year mortgage fell less than a basis point from last week to 4.05 percent. The 30-year was 4.86 percent during this week last year.
Jumbo mortgages cost 67 BPS more than conforming loans this week. The spread tumbled from 0.75 percent last week. The jumbo-conforming spread was 74Â BPS a year ago.
Borrowers inquiring about 15-year mortgages were quoted rates that were 69 BPS better than 30-year borrowers, also better than last week when the spread was 67 BPS. Fifteen-year loans were discounted 70 BPS over 30-year mortgages this week in 2011.
An analysis of data reported by the Department of the Treasury indicated that the yield on the 10-year Treasury note averaged 1.95 percent this week. The yield closed today at 1.89 percent — suggesting that mortgage rates could be around 6 BPSÂ better in the next report.
