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Refis Retreat as Rates Rise

Refis Retreat as Rates RiseMortgage Market Index 312 for week ended Sept. 30

Sept. 30, 2011

By staff

While rates had been lower early this week, they have since risen — sending prospective borrowers fleeing and cutting into new refinance activity. But aside from purchase business, mortgage market metrics have improved nicely compared to a year ago. The share of government business inched higher.

At 312 for the week ended Friday, the U.S. Mortgage Market Index from Mortech Inc. and declined 17 percent from last week. Compared to a year earlier, however, the index was 10 percent higher.

Refinance inquiries, which accounted for 70 percent of this week’s activity, were the driving force behind the diminished performance — down 17 percent. But refinances are up a third versus a year ago. Rate-term refinances represented 14 percent of the latest week’s business, and cashouts accounted for 14 percent.

Purchase transactions, which haven’t been stimulated by recently plummeting rates, were off 17 percent this week. Compared to a year ago, purchase activity has tumbled more than a fifth.

The share of business that was for loans insured by the Federal Housing Administration represented 9.01 percent of this week’s activity, higher than the 8.74 percent share in the previous report. FHA inquiries fell 15 percent over the week.

Conventional business was down 17 percent for the week.

Adjustable-rate mortgages, which made up just 5.48 percent of this week’s inquiries, were down 19 percent over the past seven days.

The driving force behind the weakened overall performance this week was rising rates.

The conforming 30-year mortgage averaged 4.141 percent, 7 basis points higher than in last week’s Mortgage Market Index report. But the 30-year was better than 4.285 percent at this time last year.

Jumbo mortgages were priced 70 BPS higher than conforming loans this week — though that was still much better than the 95-basis-point spread during this week last year. Jumbo pricing becomes much more significant tomorrow, when temporarily higher loan limits established in 2008 will no longer be in effect.

Fifteen–year mortgages were priced 68 BPS less than 30-year conforming loans, losing some of their luster from last week when they were priced 72 BPS better than the long-term mortgage.

The 10-year Treasury yield, a benchmark for mortgage rates, closed today at 1.92 percent Friday, according to the Department of the Treasury. The 10-year yielded 1.84 percent last Friday.

Full Mortgage Market Index Report

Week Ended Sept. 30, 2011

National Average Loan Amount

Top 3 States state
$298,548 HI
$279,612 MA
$272,664 CA

Bottom 3 States state
$153,330 NE
$154,783 SD
$161,962 MS

National Average Rate-Term Refinance Amount

Top 3 States state
$297,008 HI
$286,759 NV
$284,727 MA

Bottom 3 States state
$157,653 NE
$159,816 MS
$166,079 WY

National Average Cashout Refinance Amount

Top 3 States state
$337,162 HI
$277,625 AK
$271,770 CA

Bottom 3 States state
$140,434 OK
$141,684 NE
$151,495 AR

National Average Jumbo Loan Amount

Top 3 States state
$1,265,627 WI
$910,604 AZ
$850,000 NM

Bottom 3 States state
$460,750 OR
$476,281 NH
$476,667 MT

National Rate-Term Refinance Share

National Cashout Refinance Share

National Total Refinance Share

Product state State Average
Conv30 MA $301,278
Conv30 MO $204,450
Conv30 CA $297,379
Conv15 MA $263,640
Conv30 TX $208,705
Conv15 MO $184,410
Conv30 NJ $271,604
Conv30 IL $237,877
Conv20 MA $282,142
Conv30 NC $229,506
Conv30 PA $245,515
Conv30 KS $204,191
Conv30 NE $168,402
Conv15 CA $258,171
Conv15 PA $236,396

Average rate for each product from All investors Product
4.141% Conv30
3.461% Conv15
3.208% 5-1LiborARM
3.946% FHA30
3.481% FHA15
3.939% VA30
4.837% Jumbo30

Mortgage Market Index

National ARM Share

National FHA Share

Mortgage Market Index 312 for week ended Sept. 30

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