Helped by a healthy increase in purchase financing, new mortgage inquiries were higher this week. Also lifting business was a surge in jumbo business, though coming off of a holiday week didn’t hurt.
This week saw 9 percent more consumers inquire about a mortgage than last week, according to the U.S. Mortgage Market Index from Mortech Inc. and Mortgage Daily for the week ended March 2.
The index rose to 229 from last week’s 210. During the week ended March 4, 2011, the index was 206.
Behind the week-over-week improvement was home purchase financing, which grew 13 percent. However, purchase transactions only hurt the year-over-year performance, falling 29 percent.
The strength in the year-over-year performance came from refinances, with inquiries up 55 percent compared to a year ago. Refinance business was up 7 percent from the previous week.
Total refinance share narrowed to 67 percent from 68 percent. But the refinance share was much fatter than 48 percent in the same week last year.
This week’s total share reflected a 54 percent rate-term share and a 13 percent cashout share.
Jumbo mortgages were the single strongest category, with jumbo inquiries increasing 18 percent from last week. Helping to fuel jumbo activity was the premium for a jumbo loan, which fell to 60 basis points over conforming rates from a 64-basis-point spread a week earlier. The jumbo-conforming spread was 70 BPS a year ago.
Although the share of inquiries for adjustable-rate mortgages slipped to 4.68 percent from 4.71 percent in last week’s report, ARMÂ inquiries were up 10 percent. ARM share has tumbled from 9.26 percent this week last year, while ARM inquiries have fallen 42 percent from that point.
It was a similar situation for government-insured business, which was up 7 percent for the week as Federal Housing Administration share drifted down to 13.20 percent from 13.55 percent. Conventional loan inquiries were up 6 percent.
The conforming 30-year fixed-rate mortgage averaged 4.07 percent in the latest report, off from 4.10 percent seven days earlier and sinking from 5.01 percent a year earlier.
Borrowers shopping for a 15-year mortgage were quoted a 73-basis-point discount over 30-year loans, not quite as good as the 75-basis-point discount in the previous report.
Mortgage rates could be a couple BPS higher in the next report based on the 10-year Treasury note yield, which averaged 1.97 percent during the days represented in the report versus today’s close of 1.99 percent based on Treasury Department data.
