New mortgage activity took a dip this week, with inquiries for jumbo mortgages leading the pack. The decline came despite a new low for mortgage rates — which could fall even lower. But one category — adjustable-rate mortgages — actually experienced an uptick.
The average mortgage loan originator pulled 6 percent fewer pricing inquiries during the past seven days, putting the U.S. Mortgage Market Index from Mortech Inc. and Mortgage Daily for the week ended July 20 at 236.
Compared to a year ago, however, new loan inquiries were 13 percent higher.
Jumbo loan inquiries fell 8 percent from last week. Helping to drive down activity was the premium for a jumbo mortgage, which climbed to 85 basis points from the prior week’s 81 BPS. The share of overall activity that was jumbo slipped to 8.6 percent from 8.8 percent.
Conventional loan inquiries were down 6 percent from the week ended July 13 but 15 percent higher than the week ended July 22, 2011.
Also down 6 percent on a week-over-week basis were inquiries for loans insured by the Federal Housing Administration. Compared to a year earlier, FHA business was up 1 percent. FHA share was unchanged from seven days prior at 10.7 percent, though it was down from 12.1 percent this week last year.
Even new refinance activity was off 6 percent from last week. But refinances were 62 percent stronger than this week in 2011. Refinance share was unchanged from the prior report at three-quarters but higher than a little over half a year ago. This week’s share was comprised of a 61 percent rate-term share and a 13 percent cashout share.
The week-over-week decline for new purchase activity was just 5 percent. But purchase business sat 40 percent lower than this week last year.
Inquiries for the best-performing category, ARMs, were 6 percent stronger than a week ago — though ARM activity was nearly two-thirds worse than a year earlier. ARM business picked up as ARM share moved up to 3.2 percent from 2.9 percent. ARM share was 9.9 percent at the same point in 2011.
The average 30-year fixed-rate mortgage slipped less than a basis point from a week earlier to 3.63 percent — another new record low. The 30 year was 4.70 percent 12 months ago.
The spread between 15- and 30-year mortgages widened to 65 BPS from last week’s 63 BPS. The discount for a 15-year loan was much better this week last year at 88 BPS.
Mortgage rates could retreat around 3 BPS by the next report, according to an analysis of Treasury market activity. The yield on the 10-year Treasury note averaged 1.52 percent during the week covered by the Mortgage Market Index report, while the 10-year yield closed at 1.49 percent Friday, according to the Department of the Treasury.