| Purchases Lead Drop in Mortgage ActivityMortgage Market Index 383 for week ended Aug. 19
Aug. 19, 2011 By MortgageDaily.com staff |
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| Falling mortgage rates weren’t enough to ignite increased activity this week, with purchase and government business leading the decline. Still, interest in lending remains strong. Fixed mortgage rates were lower as of Friday and look likely to continue the improvement, while the 15-year rate became a more attractive option.
Mortgage pricing inquiries for purchase transactions were down nearly a quarter for the week ended Aug. 19. Compared to a year ago, purchase inquiries were 12 percent lower. Not far behind was activity for mortgages insured by the Federal Housing Administration, which tumbled 21 percent from last week. The statistics are based on the U.S. Mortgage Market Index report from Mortech Inc. and Mortgage Daily. The report tracks pricing inquiries for consumers who a shopping for a mortgage. Conventional pricing inquiries were off 18 percent, while adjustable-rate-mortgage activity was down 17 percent. ARM share was 6.63 percent, elevated from 6.33 percent in the report for the week ended Aug. 12. Refinance activity fell 16 percent but remained elevated from the same week last year. Refinance share rose to 71 percent from 69 percent last Friday and 64 percent in the week ended Aug. 18, 2010. This week’s refinance share included a rate-term share of 58 percent and a cashout share of 13 percent. Overall activity was 19 percent worse than last week’s all-time high, with the Mortgage Market Index landing at 383. Activity was still strong by historical standards. The index was 350 a year ago. The 30-year fixed-rate mortgage for this week was 4.25 percent, 2 basis points below seven days ago. A year ago, the 30 year was 4.32 percent. An indication of which way mortgage rates are headed, the yield on the 10-year Treasury note, closed today at 2.07 percent based on Department of the Treasury data. The yield sank from 2.24 percent last Friday. The 10-year activity suggests that the 30 year could be as much as 20 BPS better in next week’s report — though recent market volatility could just as easily cause rates to swing higher. The spread between the conforming 30 year and the jumbo 30 year jumped to 65 BPS from 53 BPS last week. Jumbos were priced much worse last year at 88 BPS above conforming rates. The 15-year mortgage was priced 80 BPS better than the 30 year this week. This week’ spread was more than the 75-basis-point spread that existed last week. |
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