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Weekly Refinance Activity Soars

A sharp decline in mortgage rates sent refinance activity into the stratosphere and pushed overall activity to the highest level in more than a year.

In the week ended Oct. 17, the U.S. Mortgage Market Index from LoanSifter/Optimal Blue and Mortgage Daily was 241.

Despite this being a holiday week, the index shot up 30 percent from a week earlier and was 37 percent stronger than the same week last year.

The last time the index was this high was in the week ended June 28, 2013, when it stood at 293.

Inquiries for refinances soared 47 percent from the week ended Oct. 10. A more than two-thirds gain was recorded from one year prior.

Refinance share widened to 62.2 percent from 55.0 percent in the prior report. In the same week during 2013, refinance share was 50.9 percent. The latest share was comprised of a 46.6 percent rate-term share and a 37.5 percent cashout share.

Pricing inquiries for conventional loans, which tend to move with refinances, were up 36 percent from seven days earlier and 32 percent better than in the week ended Oct. 18, 2013.

Next was adjustable-rate mortgage activity, climbing 27 percent on a week-over-week basis and 56 percent on a year-over-year basis. ARM share slipped to 12.1 percent from 12.3 percent but was wider than 10.5 percent in the same week last year.

Jumbo mortgage business rose 23 percent for the week and skyrocketed 112 percent from 12 months prior. Jumbo share narrowed to 11.8 percent from 12.4 percent but was much fatter than 7.6 percent in the year-earlier period.

Jumbo mortgage rates were 5 basis points better than conforming rates. The jumbo-conforming spread was down from a negative 12 BPS in the last report but swung from a positive 32 BPS twelve months previous.

Inquiries for Federal Housing Administration-insured mortgages were up 10 percent and increased 3 percent from a year prior. FHA share was cut to 11.3 percent from 13.4 percent a week earlier and 15.1 percent a year earlier.

Even the worst-performing category, purchase financing, jumped 9 percent from last week and climbed 5 percent on a year-over-year basis.

Behind the overall strong weekly activity were interest rates, with conforming 30-year fixed rates falling to 4.285 percent from 4.414 percent in the last report and 4.524 percent in the year-earlier report.

An even bigger improvement was made on 15-year rates, with the spread between 15- and 30-year rates widening to 91 BPS from 90 BPS. But the spread narrowed from 92 BPS one year prior.

Borrowers who didn’t lock their rates, however, could see an increase, based on Treasury market activity.

During the week covered by the Mortgage Market Index, the yield on the 10-year Treasury note averaged 2.19 percent, based on Treasury Department data. The 10-year yield closed Friday at 2.22 percent.

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