Led by an increase in inquiries for purchase financing, government-insured loans and jumbo mortgages — overall mortgage activity was higher this week. Both jumbo and 15-year loans were priced more competitively in the latest report, and overall mortgage rates are poised to come in lower in the next report.
New mortgage activity grew 9 percent from last week, pushing the U.S. Mortgage Market Index from Mortech Inc. and Mortgage Daily to 259 for the week ended Jan. 27.
The index was 22 percent higher than the same week during 2011.
Inquiries for purchase loans leapt 14 percent from last week. But purchase financing was off nearly a third from this week in 2011.
Federal Housing Administration loan inquiries jumped 12 percent over the past seven days. FHA share rose to 11.59 percent from 11.27 percent.
Jumbo business grew 11 percent compared to last week. Helping to drive the jumbo activity was the jumbo rate, which was priced 60 basis points higher than the conforming rate — better than the 64-basis-point jumbo-conforming spread in the prior report and 73 BPS in the same week last year.
Conventional loan inquiries were up 9 percent over the prior week.
The increase in refinance activity was just 7 percent, though refinance business was up 73 percent from a year earlier. Refinance share was trimmed to 72 percent from 73 percent in the prior report but was much higher than 49 percent 12 months ago. This week’s refinance share included a 58 percent rate-term share and a 14 percent cashout share.
Inquiries for adjustable-rate mortgages were up just 2 percent for the week, while ARM share retreated to 4.49 percent from 4.81 percent.
The conforming 30-year fixed rate averaged 4.098 percent this week, higher than last week’s 4.024 percent but well below 4.92 percent this week last year.
Borrowers inquiring about a 15-year mortgage were quoted an interest rate that was 72 BPS better than a 30-year loan. Fifteen-year loans were more attractive than last week, when the spread was 69 BPS.
An analysis of Treasury market data points to an 8-basis-point reduction in mortgage rates by the time the next report is issued. The yield on the 10-year Treasury note averaged 2.01 percent this week, based on Treasury Department data. But the 10-year yield closed at 1.93 percent today.
