Already low interest rates found room to fall further this week, but the decline wasn’t enough to overcome a holiday week slump that had new business slower. Leading overall activity down this week was financing for home purchases.
A 13 percent decline from last week left the U.S. Mortgage Market Index from Mortech Inc. and Mortgage Daily at 198 for the week ended Nov. 16 — a week that included Columbus Day. The index stands 18 percent lower than it did during this week last year.
Purchase financing took the biggest hit, falling 15 percent from the week ended Nov. 9. Purchase business has tumbled 47 percent from the same week in 2011.
Inquiries for conventional mortgages were down 13 percent from the previous report and have eroded 17 percent over the past year.
A more than 12 percent week-over-week decline hit inquiries for adjustable-rate mortgages, while ARM activity was off more than two thirds from the week ended Nov. 18, 2011. ARMÂ share was unchanged from last week at 2.3 percent but narrowed from 5.9 percent a year ago.
Refinance inquiries were down almost 12 percent from last week. Refinances were off just 3 percent from the same week a year earlier. Refinance share widened to 76.8 percent from 76.2 percent the prior week and has grown from 64.5 percent 12 months earlier. This week’s refinance share reflected a 62.0 percent rate-term share and a 14.8 percent cashout share.
Inquiries for jumbo mortgages were off less than 12 percent for the week even as jumbo share grew to 8.2 percent from 8.1 percent. Pricing on jumbo mortgages was 55 basis points higher than conforming pricing. Last week, the jumbo-conforming spread was 58 BPS.
Fifteen-year mortgages were discounted by 63 BPS from 30-year loans, not as good as the 67-basis-point discount in the prior report. A year ago, 15-year mortgages were priced 65 BPS less than 30-year loans.
Price quotes on 30-year fixed-rate mortgages averaged 3.491 percent, lower than 3.515 percent in the previous report but not quite as good as the record-low 3.411 percent recorded for the week ended Sept. 28, 2012. During this week last year, the 30 year averaged 4.229 percent.
Not much difference can be expected for mortgage rates in the next Mortgage Market Index report based on a Mortgage Daily analysis of Treasury market activity this week. During the week covered in the Mortgage Market Index report, the 10-year Treasury yield averaged 1.59 percent, while it closed at 1.58 percent on Friday, according to data delivered by the Department of the Treasury.
