Mortgage Daily

Published On: July 5, 2014

As loan originators wound down activity going into the fourth of July, refinances took the biggest hit. Also putting a damper on business were slightly higher interest rates.

The U.S. Mortgage Market Index from LoanSifter/Optimal Blue and Mortgage Daily was 137 in the week ended July 4.

A reflection of average per-user pricing inquiries by LoanSifter clients, the index was down 18 percent from a week earlier and a quarter less than a year earlier.

Out front of the holiday week decline were inquiries for refinances, which dropped 21 percent from the week ended June 27. Refinances were down 38 percent from the same week in 2013.

Forty-five percent of all activity was for refinances. Refinance share slipped from 47.0 percent in the previous report and declined from 54.3 percent in the same week last year. The most recent share consisted of a 30.4 percent rate-term share and a 14.8 percent cashout share.

The next-biggest loser was the adjustable-rate mortgage category — falling 20 percent for the week. But ARM activity was a percent higher than 12 months prior. ARM share slipped to 10.6 percent from 10.8 percent but was wider than 7.9 percent in the week ended July 5, 2013.

A 19 percent decline was recorded for conventional activity, while the year-over-year decline was a third.

New jumbo business fell 16 percent but stood at 22 percent higher than it did a year earlier. Jumbo share inched up to 9.9 percent from 9.7 percent seven days earlier and jumped from 6.1 percent 12 months earlier.

Jumbo rates were 8 basis points better than conforming rates, thinning from a negative 11-basis-point spread in the previous report. The jumbo-conforming spread swung from a positive 40-basis-point spread in the year-earlier report.

Pricing inquiries for purchase financing declined 15 percent from the prior report and were off 10 percent from one year prior.

The week’s best performer was the Federal Housing Administration category, with FHA-insured inquiries off 14 percent. But government-insured activity has declined by a quarter over the past year. FHA share climbed to 16.0 percent from 15.4 percent and was 15.9 percent in the same week a year previous.

Conforming 30-year fixed rates averaged 4.496 percent, barely changed from 4.495 percent in the prior report and down 8 BPS from one year prior.

The discount for a 15-year mortgage crept up to just over 98 BPS from just under 98 BPS in the previous week. The spread has widened considerably from 83 BPS one year earlier.

Fixed rates are poised to come in around 5 BPS higher in the next report based on Treasury activity during the week covered by the latest Mortgage Market Index report. The 10-year Treasury yield averaged 2.60 percent during the past week, while it closed at 2.65 percent on Thursday, according to Treasury Department data.

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