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Mortgage Activity Rises After Holiday Week

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Adjustable-rate mortgages led a revival in mortgage activity coming out of the holiday week. Also excelling were purchase and jumbo transactions.

At 215, the U.S. Mortgage Market Index from LoanSifter and Mortgage Daily for the week ended July 12 was 18 percent higher than a week ago. Compared to a year ago, however, the index has retreated 22 percent.

ARM pricing inquiries surged by 43 percent when compared to the week ended July 5. Compared to a year earlier, ARM activity was up 45 percent.

ARM share rose to 9.6 percent from 7.9 percent and was also up from 5.1 percent in the same week last year.

Jumbo business moved up 28 percent from the previous week and was 15 percent better than the week ended July 13, 2012. Jumbo loans accounted for 6.7 percent of overall weekly activity, up from 6.1 percent in the previous report. Jumbo share was just 4.5 percent one year prior.

Jumbo mortgages were priced at a 30-basis-point premium over conforming loans this week, improving from the 40-basis-point spread in the last report. The jumbo-conforming spread was 48 BPS a year ago.

Pricing inquiries for purchase financing rose 28 percent on a week-over-week basis and 54 percent on a year-over-year basis.

Inquiries for loans insured by the Federal Housing Administration grew by 19 percent over the past seven days but were off nearly a quarter from the same seven-day period in 2012. FHA share inched up to 16.1 percent from 15.9 percent but was off from 16.5 percent in the year-earlier report.

A 15 percent improvement was recorded from last week for conventional mortgage pricing inquiries, while there was a 28 percent drop from one year prior.

The week’s worst-performing category was refinances, with pricing inquiries up just 9 percent for refinance transaction. Refinance business was off by nearly half from one year earlier.

Refinance share fell to 50.3 percent from 54.3 percent in the last report and three-quarters in the year-earlier report. This week’s share consisted of a 37.7 percent rate-term share and a 12.7 percent cashout share.

The average 30-year fixed-rate conforming mortgage was 4.743 percent, rising from 4.571 percent last week. Rate have surged from a year earlier, when the 30 year averaged 3.768 percent.

Rates on 15-year mortgages averaged 91 BPS less than on 30-year loans. The spread widened from 83 BPS last week and 63 BPS in the same week last year.

Rates aren’t likely to be much different in next week’s report, according to Mortgage Daily’s analysis of this week’s Treasury market activity.

Treasury Department data indicated that the yield on the 10-year Treasury note averaged 2.64 percent during the week of the latest report. The 10-year yield closed Friday at 2.61 percent. The 3-basis-point difference between this week’s average and Friday’s closing figure doesn’t suggest much movement ahead.

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