As fixed rates again inched higher, interest in adjustable-rate mortgages increased for the first time in a month. Mortgage rates appear to be headed even higher. Overall inquiries for mortgages this week crept up as purchase and jumbo activity strengthened.
The U.S. Mortgage Market Index from Mortech Inc. and Mortgage Daily finished the week ended Aug. 17 at 213. The index, which represents average pricing inquiries pulled by loan originator clients of Mortech, drifted up 1 percent from last week but sank 44 percent from the same week last year.
The biggest improvement was in inquiries for adjustable-rate mortgages, which shot up 15 percent from the week ended Aug. 10 — though last week’s ARM activity was the lowest since Mortgage Daily began tracking it in February 2011. But compared to a year earlier, ARM activity has plummeted 73 percent.
ARM share, meanwhile, crept up to 3.2 percent from 2.8 percent the previous week. ARM share was 6.6 percent in the week ended Aug. 19, 2011.
The next-strongest category was purchase financing, with inquiries rising 5 percent. Still, purchase activity was off 44 percent from a year prior.
Inquiries for jumbo mortgages were also up 5 percent from last week. The improved jumbo performance reflected a decline to 62 basis points in the premium over a conforming loan for a jumbo mortgage compared to 72 BPS in the previous report. The jumbo-conforming spread was 65 BPS during the same week last year.
Federal Housing Administration business rose 2 percent for the week but was off by nearly a quarter from a year ago. FHA share edged up to 11.7 percent from 11.5 percent and was also better than 8.6 percent a year earlier.
The only category to see a decline this week was refinance, which slipped 1 percent. Refinance business was 45 percent lower than 52 weeks ago. Refinance share was 71 percent, a little lower than 72 percent in the previous report and about the same as this week in the previous year.
The 30-year fixed-rate mortgage averaged 3.749 percent, increasing for the third consecutive week from 3.703 percent last week. A year ago, the 30 year averaged 4.246 percent.
Fifteen-year shoppers were quoted a rate that was 68 BPS better than the 30-year rate, improving a little from the 66-basis-point spread a week ago but nowhere near as good as the 80-basis-point discount this week in 2011.
Mortgage rates have the potential to be around 8 BPS worse in the next Mortgage Market Index report based on Treasury market activity. The yield on the 10-year Treasury note averaged 1.73 percent during the week reflected in the latest report, while the 10-year yield closed at 1.81 percent Friday, according to data from the Department of the Treasury.