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Jumbos and Refis Lead Declining Mortgage Activity

Borrowing activity on home purchases was down for the third consecutive week (originally incorrectly reported as the fourth consecutive week), though jumbo and refinance were the hardest-hit categories on a week-over-week basis.

 

Finishing at 173 for the week ended April 10, the U.S. Mortgage Market Index from LoanSifter/Optimal Blue and Mortgage Daily new mortgage activity was down 7 percent from the prior week’s report.

The index, which provides insight into average per-user product-and-pricing inquiries by LoanSifter customers, was down nearly 8 percent from the same time last year.

At a 10 percent week-over-week decrease, jumbo loan activity was the poorest performing category for the week. The latest numbers showed a 5 percent decline from a year earlier.

Jumbo loan share also was down to 10.4 percent from 10.6 percent in the seven days preceded. The share, however, was up from the 10.0 percent reported for the week ended April 11 last year.

This week’s jumbo interest rates climbed to nine basis points over conforming mortgages versus the seven BPS from the previous week’s calculation. The jumbo-conforming spread was wider than under one basis point in the same week during 2014.

Though refinance inquiries fell 8 percent from the week ended April 3, they expanded by 21 percent compared to a year earlier — the strongest year-over-year performing category. Refinance share this week thinned to 59.6 percent from 60.4 percent a week prior, yet rose above the 45.4 percent this time last year. These recent figures included a 15.6 cashout share and a 44.0 percent rate-term share.

Conventional activity was down 8 percent from last week and 13 percent from the same period in 2014.

At 5 percent lower than the prior week’s activity, purchase financing plummeted nearly a third from 12 months prior. The purchase category has been down each week since March 20.

Inquiries on loans insured by the Federal Housing Administration stepped down by 4 percent but were 14 percent ahead of the same week in the previous year. The week’s FHA share went widened to 19.4 percent from the prior report’s 18.8 percent and the previous year’s 15.6 percent.

Adjustable-rate mortgage activity saw the smallest loss with a 3 percent week-over-week decline. However, with ARM business down 36 percent from twelve months ago, this category was the weakest performer in year-over-year activity.

Still, for the most current week, ARM share did rise to 9.3 percent from 8.9 percent despite dropping below the 13.4 percent reported this time last year.

For the most recent period, conforming 30-year fixed rates averaged 4.087 percent, less than 1 basis point higher than last week and 56 BPS lower than the same week last year.

Rate quotes for 15-year home loans were 88 BPS better than rates on 30-year mortgages. The spread increased by a basis point from the seven days prior but thinned from 102 BPS the same time last year.

Fixed rates could see around 3 BPS deterioration in next week’s report, according to Treasury market activity analysis by Mortgage Daily.

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