New government-insured activity led a resurgence in overall mortgage business this week. Jumbo activity lagged other categories even though the spread between conforming and jumbo mortgages has narrowed considerably.
Loan originators locked in 22 percent more loans than last week, leaving the U.S. Mortgage Market Index from Optimal Blue and Mortgage Daily for the week ended Feb. 8 at 206. Rate lock volume was up 19 percent over the revised level from the same week last year.
Leading the pack in the most-recent report were mortgages insured by the Federal Housing Administration, with business jumping 26 percent from the week ended Feb. 1. Compared to a year earlier, FHA rate locks were 10 percent stronger.
FHA share nudged up to 20 percent from 19 percent but has slimmed from the week ended Feb. 11, 2012, when 21 percent of all business was government.
The next-best category, refinances, moved up 22 percent from the previous week. Refinance activity was 5 percent better than this week in 2012.
Refinance share was mostly unchanged from seven days prior at 46.7 percent but has narrowed from 53.0 percent at the same point last year. The most recent share reflected a 35.7 percent rate-term share and an 11.0 percent cashout share.
Close behind refinances was purchase financing, which also gained 22 percent over the prior week. Purchase rate locks were 36 percent better than the same week a year prior.
Conventional rate locks were up 21 percent for the week and 22 percent higher on a year-over-year basis.
Prospective borrowers opting for an adjustable-rate mortgage increased by 11 percent compared to the previous report but were off 19 percent versus the same week in the previous year.
ARM share fell to 4.4 percent from 4.8 percent a week earlier and 7.1 percent a year earlier.
This week’s weakest performance was turned in by the jumbo category, with corresponding rate locks up just 4 percent for the week. But jumbo business has increased by 46 percent from the same point in 2012 — the biggest year-over-year gain of any category.
Jumbo share fell to 8.2 percent from 9.6 percent but was up from 7.9 percent this week last year.
The lagging jumbo metrics defied a decline in the spread between interest rates on jumbo and conforming mortgages, which retreated to 22 basis points from 25 BPS in the previous report. The jumbo-conforming spread was down by more than half from 50 BPS in the year-earlier report.
Interest rates on 30-year mortgages averaged 3.862 percent, moving marginally higher from 3.859 percent seven days prior. Fixed-rate 30-year loans averaged 4.160 percent 12 months prior.
Prospective 15-year borrowers were locked at a rate that was 78 BPS better than 30-year rates, improving from the 77-basis-point spread in the previous report and 71 BPS a year previous.