New mortgage activity increased from the holiday week and would have risen more if it weren’t for refinance and conventional business. Fixed rates are likely to be higher in the next report.
At 158 for the week ended Sept. 12, the U.S. Mortgage Market Index from LoanSifter/Optimal Blue and Mortgage Daily climbed 17 percent from the previous week — which included the Labor Day holiday.
An 8 percent decline from the same week last year was recorded for the index, which reflects average per-user pricing inquiries by clients of LoanSifter.
The week’s biggest gain was made by inquires for adjustable-rate mortgages, which shot up 23 percent from the week ended Sept. 5. ARM activity has risen 2 percent on a year-over-year basis. ARM share widened to 11.9 percent from 11.4 percent and was fatter than 10.8 percent during the same week last year.
Purchase financing activity climbed 19 percent from a week earlier but declined 11 percent from the week ended Sept. 13, 2013.
A more than 18 percent rise was tracked for conventional mortgages, although conventional activity remained slightly lower than it was in the week before Labor Day. Conventional business was down by 16 percent compared to a year earlier.
Inquiries for mortgages insured by the Federal Housing Administration escalated nearly 18 percent from seven days prior but came up 8 percent short of the same week in 2013. FHA share inched past 15.6 percent from just under 15.6 percent in the previous report and the year-earlier report.
Refinance business improved 16 percent on a week-over-week basis but fell 5 percent on a year-over-year basis. Refinances remained slower than their pre-holiday level.
Refinances accounted for 47.4 percent of all activity. Refinance share narrowed from 48.1 percent in the last report but was up from 45.8 percent 12 months prior. The share was comprised of a 30.6 percent rate-term share and a 16.8 percent cashout share.
The weakest performance versus the previous week was with jumbo mortgages, which increased 15 percent. Jumbo business was up by nearly a third compared to the same week last year. Jumbo share fell to 11.7 percent from 12.0 percent but was much fatter than 8.2 percent 12 months previous.
Jumbo interest rates were 9 basis points less than conforming rates in the latest report. The jumbo-conforming spread thinned from a negative 13 BPS one week earlier and swung from a positive 27-basis-point spread a year earlier.
Conforming 30-year fixed rates climbed to 4.505 percent from 4.494 percent but were lower than 4.836 percent at the same point in 2013.
Inquiries for 15-year mortgages yielded rates that were 93 BPS less than on 30-year loans. The spread fell from 97 BPS in the previous report and 96 BPS in the year-prior report.
Mortgage Daily’s forecast is for fixed rates to be roughly 8 BPS higher in the next report. The outlook is based on the 10-year Treasury note yield, which Treasury Department data indicate averaged 2.54 percent during the week covered by the Mortgage Market Index and closed Friday at 2.62 percent.
