More people inquired about a mortgage to finance a home purchase this week, as was the case for government mortgages. Strength in the two categories was enough to drive overall activity higher. But inquiries for refinances, adjustable-rate mortgages and jumbo mortgages all declined.
Loan pricing inquiries inched up 1 percent over the past seven days, leaving the U.S. Mortgage Market Index from Mortech Inc. and Mortgage Daily at 242 for the week ended Feb. 17.
The index was 240 a week earlier and 201 a year earlier.
Helping to nudge the index higher was purchase activity, which rose 4 percent from the week ended Feb. 10. But purchase business was nearly a third worse than the same week in 2011.
Inquiries for FHA loans were also higher, rising 3 percent from last week. FHA share rose to 12.61 percent from 12.35 percent seven days ago.
Conventional loan inquiries edged up less than 1 percent from the previous report.
However, fewer people inquired about refinance, with activity down less than 1 percent over the past week. Refinance activity, however, leapt 76 percent from the week ended Feb. 18, 2011.
Refinance share, meanwhile, slipped to 70 percent from last week’s 71 percent. Just 48 percent of activity during the same week last was for refinances. This week’s share reflected a 58 percent rate-term share and a 13 percent cashout share.
Jumbo business was down 5 percent compared to a week prior. The decline came as the premium for a jumbo mortgage rose to 64 basis points from 61 BPS last week. The jumbo-conforming spread was much higher a year ago at 73 BPS.
The worst-performing category this week was adjustable-rate mortgages. ARMÂ activity tumbled 9 percent and has fallen 52 percent from a year ago.
ARM share dropped to 4.13 percent from last week’s 4.75 percent and was down by more than half from the same week in 2011, when ARMÂ share was 9.50 percent.
Prospective borrowers shied away from ARMs as the average 30-year fixed-rate mortgage drifted down to an amazingly low 4.01 percent from 4.02 percent in last Friday’s report. The 30 year was 5.11 percent at this point last year.
Fifteen-year quotes were 72 BPS lower than on 30-year loans, more competitive than the 71-basis-point spread last week but not as good as 73Â BPS a year prior.
A benchmark for mortgage rates, the yield on the 10-year Treasury note, averaged 1.97 percent this week. Today, the 10-year yield closed at 2.01 percent. The movement suggests that rates could be around 4 BPS worse in next week’s Mortgage Market Index report.
