Fewer pricing inquiries were pulled by mortgage loan originators ahead of the Memorial Day weekend despite new record-low interest rates. But home purchase financing and government-insured activity held steady.
A 6 percent decline in new activity from last week left the U.S. Mortgage Market Index from Mortech Inc. and Mortgage Daily for the week ended May 25 at 220. Compared to the same week during 2011, the index was off 1 percent.
The biggest drop in activity came with adjustable-rate mortgages, with ARM pricing inquiries tumbling 10 percent for the week. ARM business was 58 percent worse than a year earlier.
ARM share was 4.2 percent, falling from 4.4 percent in the week ended May 18. ARM share was 10.0 percent this week in 2011.
Jumbo business was also lower, falling 9 percent from the prior week. The share of overall inquiries that were for jumbo loans slipped to 9.1 percent from 9.4 percent. Jumbo mortgages were priced at a 58-basis-point premium over conforming loans, improving from last week’s 63-basis-point spread. But the jumbo-conforming spread was far better during this week last year:Â 36 BPS.
Interest in refinances waned, falling 8 percent for the week. But refinance inquiries were up 39 percent from a year ago. Total refinance share edged down to 69 percent from 70 percent but was much higher than 49 percent a year earlier. This week’s total refinance share was comprised of a 56 percent rate-term share and a 13 percent cashout share.
Loan originators pulled 6 percent fewer conventional mortgage inquiries than they did in the previous report. But conventional activity was up 4 percent from the same point last year.
Inquiries for mortgages insured by the Federal Housing Administration declined just 1 percent for the week but were 28 percent lower than this week in 2011. FHA share widened to 10.2 percent from 9.8 percent in the previous report but fell from 13.9 percent this week during the previous year.
The best-performing category compared to last week was purchase financing, with the number of inquiries per originator unchanged over the last seven days. Purchase business stands, however, 39 percent lower than a year prior.
While it was off less than a basis point from last week, the 30-year fixed-rate mortgage still set a new record low at 3.873 percent. The 30 year was 87 BPS higher in the week ended May 27, 2011.
The discount for a 15-year mortgage was 72 BPS, around the same spread as in the previous report.
Not much change is likely by the time the next Mortgage Market Index report rolls around, according to an analysis of Treasury market data. The yield on the benchmark 10-year Treasury note averaged 1.75 percent during the week that the Mortgage Market Index data was compiled, the same as it closed at Friday, according to the Department of the Treasury.
