Driven primarily by improved interest rates, new mortgage activity was up for the third consecutive week. Refinances made the most headway. Interest rates on jumbo mortgage were much better.
The U.S. Mortgage Market Index from LoanSifter and Mortgage Daily finished the week ended Jan. 17 at 172. The index reflects average activity per LoanSifter user.
Compared to a year earlier, activity tumbled 38 percent. The numbers from a year ago were revised to reflect statistics from the same data provider.
Refinances had the strongest increase, rising 7 percent from the week ended Jan. 10. But refinances remain 59 percent lower than the same week last year — the worst year-over-year performance.
Refinance share inched up to 49.5 percent from the prior week’s 48.2 percent but narrowed substantially from 75.4 percent 12 months earlier. The most recent share reflected a 34.9 percent rate-term share and a 14.5 percent cashout share.
Conventional loans turned in the next-best performance, climbing 6 percent from the prior report. But conventional business was off 45 percent from the week ended Jan. 18, 2013.
Inquiries for jumbo mortgages rose 4 percent on a week-over-week basis and 19 percent on a year-over-year basis. Jumbo share, meanwhile, was unchanged from the previous week at 9.2 percent but has nearly doubled from 4.8 percent in the same week during 2013.
Jumbo mortgage rates were just 13 basis points higher than conforming rates, significantly improving from the 22-basis-point jumbo-conforming spread a week ago. The spread has collapsed compared to 42 BPS a year ago.
Pricing inquiries for mortgages insured by the Federal Housing Administration inched up less than a percent from the last report and tumbled 37 percent from one year prior.
FHA share narrowed to 16.3 percent from 17.0 percent but widened from 16.2 percent 12 months earlier.
Reflecting the increased attractiveness of fixed rates, adjustable-rate mortgage activity slowed 4 percent. But ARM business was 102 percent higher than the same week last year.
ARM share fell to 11.8 percent from 12.8 percent but was much fatter than 3.6 percent in the year-earlier report.
Fixed rates on 30-year conforming loans averaged 4.707 percent, down from last week’s 4.770 percent average. Fixed rates, however, have soared 105 BPS compared to the same week in 2012.
Shoppers on 15-year mortgages were quoted rates that were 96 BPS better than for 30-year shoppers, not as much of a discount as the 98 BPS last week but better than the 66 BPS spread in place one year prior.
Not much change is likely with fixed rates by the time the next report rolls around based on Mortgage Daily’s analysis of Treasury market activity.
Fixed mortgage rates tend to track the yield on the 10-year Treasury note, which averaged 2.86 percent during the week covered by the latest Mortgage Market Index, according to Treasury Department data. The 10-year yield closed at 2.84 percent Friday.