With the holiday season in full swing, loan originators did very little business this week. Leading a big weekly decline were jumbo and adjustable-rate mortgages.
A 48 percent drop from last week left the U.S. Mortgage Market Index from Optimal Blue and Mortgage Daily for the week ended Friday at just 88. Activity reflects the average volume of rate locks registered by originator clients of Optimal Blue.
It was the lowest level of activity since the week ended Jan. 6, when the index was a revised 84. During the same week last year, the index was 131 — though the year-earlier data was based on pricing inquiries rather than rate locks.
This week’s biggest decline was with rate locks for ARMs, which sank 63 percent from the week ended Dec. 21. ARM activity was down 69 percent from the same week last year. ARM share was cut to 2.5 percent from 3.5 percent the prior week and 5.1 percent during the same week in the prior year.
The second-worst performing category was jumbo, with activity falling 62 percent from last week. At the same time, jumbo share of overall business fell to 5.8 percent from 7.9 percent seven days earlier. The slimmer share came despite a decrease in the premium for jumbo mortgages to 31 basis points from the 34-basis-point jumbo-conforming spread in the prior report.
Next were rate locks for mortgages insured by the Federal Housing Administration, which were down by more than half for the week. FHA business, however, grew 6 percent from the week ended Dec. 30, 2011, based on using pricing inquiries for the year-earlier period. FHA share slipped to 18.1 percent from the previous week’s 19.4 percent.
Refinance rate locks followed, tumbling 49 percent from last week and a year earlier. Refinance share fell to 51 percent from 52 percent in the last report. This week’s share was comprised of a 40 percent rate-term share and a 10 percent cashout share.
Conventional business was off 47.4 percent from last week and 38.1 percent lower than the same week last year.
The least-bad performing category was purchase financing, with locks falling 47.2 percent from the last report. Purchase activity, however, was off just 2.2 percent from a year earlier.
The average 30-year fixed-rate mortgage improved to 3.666 percent from 3.683 percent in the last Mortgage Market Index report. One year previous, the 30 year averaged 4.089 percent.
The discount for a 15-year mortgage was just under 72 BPS, slipping from just over 72 BPS a week prior.