Mortgage Daily

Published On: January 2, 2018

Mortgage business went out with a whimper in 2017, with new activity during the final week — which included Christmas — plunging to the lowest level since tracking began. Jumbo activity has doubled over the past year.

A predictor of upcoming originations,
Mortgage Daily’s
U.S. Mortgage Market Index, was 72 in the seven days that concluded on Dec. 29 — the lowest level on record since it was launched in late 2009.

The index, which is based on average per-user rate locks submitted by clients of OpenClose, tumbled 41 percent from the preceding seven-day period and was even down 11 percent from the same-seven days in 2016. No seasonal adjustments are made to the index.

Taking the deepest dive from the week ended Dec. 22 were rate locks for refinances: 45 percent. But refinance activity was off just
a percent from the report from a year ago. The share of refinances thinned to 40.8 percent from 43.7 percent but was wider than 36.9 percent a year prior. The most-recent share was made up of a 16.5 percent rate-term share and a 24.4 percent cashout share.

A more than 41 percent drop was recorded for government business, which fell 3 percent from the week ended Dec. 30, 2016. Government share was 39.8 percent, hardly different than 39.9 percent in the last report but more broad than 36.4 percent twelve months earlier. Government share was comprised of a 27.7 percent FHA share and a 12.1 percent VA share.

At 43, the Conventional MMI tumbled nearly 41 percent and was 16 percent lower than one year prior.

The Purchase MMI fell 38 percent to 42 and was down 16 percent from the same week in 2016.

Rate locks for adjustable-rate mortgages dropped 21 percent. But ARM business has improved 58 percent on a year-over-year basis. ARM share widened to 15.3 percent from 11.5 percent a week earlier and 8.7 percent a year earlier.

A 4 percent
dip was recorded for jumbo rate locks, while the category has doubled from a year previous. Jumbo share ballooned to 14.1 percent from 8.7 percent and was just 6.3 percent in the year-prior report. Interest rates on jumbo mortgages were 55 basis points more than conforming rates reported by Freddie Mac. The spread dipped from 56 BPS in the last report and was cut from 77 BPS in the report from the same week last year.

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