With adjustable-rate mortgages leading the way, new mortgage inquiries fell this week. Both jumbo loans and 15-year mortgages were more competitive over the past seven days. But rates are likely to be higher in next week’s report.
Mortgage business was down 2 percent based on the U.S. Mortgage Market Index from Mortech Inc. and Mortgage Daily for the week ended March 9. The index was 225, falling from 229 a week earlier but better than 211 a year earlier.
The worst-performing category in the latest report was ARM business, which dropped 9 percent for the week. ARM activity was down by half compared to the week ended March 11, 2011.
ARM share slipped to 4.39 percent from 4.68 percent in the week ended March 2, 2012. A year ago, ARM share was 9.49 percent.
As jumbo share inched up to 8.61 percent from 8.57 percent, jumbo activity was down less than 5 percent.
Inquiries for loans insured by the Federal Housing Administration were down 3 percent from last week. FHA share eased to 13.04 percent from 13.20 percent.
Also 3 percent lower were inquiries for purchase financing. Purchase activity has tumbled a third from the same time in 2011.
The number of borrowers out shopping for a refinance was off 1 percent from last week but up by half from 12 months ago.
Refinances represented more than two-thirds of this week’s business, the same as last week. Refinance share was just 48 percent during this week last year. The latest share was reflective of a 54 percent rate-term share and a 13 percent cashout share.
Hurting this week’s Mortgage Market Index were interest rates, with the average 30-year, fixed-rate mortgage creeping up to 4.086 percent from last week’s 4.073 percent. But the 30 year was substantially lower than 4.963 percent a year ago.
Prospective borrowers shopping for a 15-year mortgage were quoted a rate that was 76 basis points better than 30-year rates. In the previous report, the spread was 73 BPS.
Jumbo borrowers paid a 59-basis-point premium over conforming borrowers this week, improving from last week’s jumbo-conforming spread of 60 BPS.
Mortgage rates could be even higher in next week’s report based on Treasury market activity. The yield on the 10-year Treasury note averaged 1.99 percent during the period covered in the Mortgage Market Index, while it closed today at 2.04 percent, according to Treasury Department data. The movement suggests that rates might be around 5 BPS worse in the next report.