New mortgage activity jumped more than 20 percent coming out of the holiday week. The biggest bounce was with pricing inquiries for jumbo loans. Rates were little moved this past week but are set to soar in the next report.
A 22 percent decline from a week earlier left the U.S. Mortgage Market Index from Mortech Inc. and Mortgage Daily for the week ended Sept. 14 at 210. The index, which reflects changes in the average pricing inquiries pulled per loan originator, was down 23 percent from a year earlier.
The biggest gainer this week was the jumbo category, with jumbo activity rising 29 percent from the week ended Sept. 7. Jumbo share was 8.9 percent, widendng from 8.4 percent in the prior report.
Borrowers who inquired about jumbo pricing were quoted rates that were 65 basis points higher than conforming borrowers. In the previous report, the jumbo-conforming spread was 66Â BPS.
Up 22.7 percent from last week, the refinance category had the next-biggest increase. But refinance activity fell short of the year-earlier level by 18 percent.
Seventy-two percent of the latest total activity was refinance, barely wider than in the previous report but clearly ahead of the 68 percent refinance share in the same week last year. This week’s rate-term share was 57.9 percent, while cashouts accounted for 14.4 percent of total activity.
Conventional loan inquiries were 22.6 percent higher than last week but down by nearly a quarter from the week ended Sept. 16, 2011.
Purchase financing was up 22 percent for the week but off by more than a third from this week in 2011.
Even inquiries for adjustable-rate mortgage picked up 21.1 percent from last week. But ARMÂ volume has plummeted 68 percent from 12 months earlier. ARMÂ share was mostly unchanged from last week at 2.8 percent and stands well below 6.7 percent in the year-earlier period.
The smallest week-over-week gain — 20.8 percent — was with inquiries for loans insured by the Federal Housing Administration. FHA business was down 12 percent from the same week last year.
FHAÂ share, meanwhile, slipped to 10.9 percent from 11.0 percent in the prior report but has strengthened some from 9.6 percent one year prior.
Thirty-year mortgages averaged 3.669 percent in the current report, edging up from 3.648 percent seven days earlier but lower than 4.227 percent 12 months earlier.
The discount for a 15-year mortgage rose to 67 BPS from 63 BPS last week but was nowhere near the 81-basis-point discount being quoted to 15-year loan prospects a year ago.
By next week’s Mortgage Market Index report, mortgage rates are likely to around 17 BPS higher based on Treasury Market Activity. The yield on the 10-year Treasury note averaged 1.71 percent during the week represented in the latest report. while it closed at 1.88 percent on Friday, according to the Department of the Treasury.
The upward swing followed the Federal Reserve Board’s announcement Thursday that it would elevate its purchases of mortgage-backed securities that are guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae. The new round of quantitative easing will increase the Fed’s agency MBS purchases by $40 billion a month.
