Government-insured mortgage business led an overall decline in new weekly loan inquiries. While refinance business slowed, it still stands at nearly double the level of a year ago. Mortgage rates were mixed this week but could inch higher by the next report.
The average number of pricing inquiries pulled by loan originators during the week ended June 29 was down 3 percent, putting the U.S. Mortgage Market Index from Mortech Inc. and Mortgage Daily at 216. But the index was up a third compared to the week ended July 1, 2011.
The worst-performing category was Federal Housing Administration lending, with new inquiries for FHA-insured mortgages falling 15 percent from last week. FHA business, however, rose 14 percent from a year earlier. FHA share dropped to 11.6 percent from last week’s 13.2 percent share and 13.45 percent in the same week last year.
Originators pulled 4 percent fewer refinance inquiries than they did in the prior report. But refinance activity remains 96 percent higher than this week last year.
Refinance share barely moved lower at 71 percent, though it sits well above 48 percent level a year prior. This week’s share reflected a 58 percent rate-term share and a 13 percent cashout share.
Inquiries for adjustable-rate mortgages were also off 4 percent for the week. ARM activity was down by more than half from 12 months ago. ARM share eased to 7.1 percent from last week’s 7.4 percent. The share has diminished significantly from 9.8 percent during the same week in 2011.
New jumbo activity was 3 percent lower than last week. Jumbo loans became less expensive relative to their conforming counterparts, with the jumbo-conforming spread falling to 72 percent from 73 BPS seven days ago.
Conventional loan inquiries slipped 1 percent for the week but remain 36 percent higher than a year prior.
Purchase financing inquiries were also off 1 percent but down nearly a quarter from the same point last year.
The 30-year fixed-rate mortgage averaged 3.77 percent in the latest report, 1 basis point below a week ago and the lowest level on record since the Mortgage Market Index debuted in 2009. The 30 year was 100 BPS better, however, than a year ago.
There was a 64-basis-point discount for 15-year mortgages this week, not as good as the 66-basis-point discount last week. During this week in 2011, 15-year loans were priced 84 BPS better than 30-year mortgages.
Rates aren’t likely to move a whole lot by the time next week’s index is released based on an analysis of Treasury market activity. The yield on the 10-year Treasury averaged 1.65 percent during the period covered by this week’s Mortgage Market Index report, while 10-year yield averaged 1.67 percent today, according to data reported by the Department of the Treasury.