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Christmas Week Mortgage Activity Off from 2013

While a decline in mortgage business was to be expected from the Christmas holiday, activity was also down from the same week last year. Rising rates might have played a role in the drop.

In the week ended Dec. 26, the U.S. Mortgage Market Index from LoanSifter/Optimal Blue and Mortgage Daily was 90. The index is a reflection of average per-user product-and-pricing inquiries by clients of LoanSifter.

That was a 49 percent tumble from the previous report. More significantly, the index was off more than 6 percent from the week that included Christmas last year.

The biggest drop hit inquiries for jumbo mortgages, which plummeted 55 percent from the week ended Dec. 19. Jumbo activity was also worse than the same week in 2013, with inquiries sliding 19 percent.

Jumbo mortgages accounted for 10.0 percent of all inquiries. The jumbo share slipped from 11.3 percent a week earlier and 11.6 percent a year earlier.

Rates on jumbo mortgages were 12 basis points higher than on conforming mortgages. The jumbo-conforming spread fattened from 7 BPS in the last report but thinned from 21 BPS in the year-prior report.

A more than 54 percent week-over-week decline hit inquiries for adjustable-rate mortgages, while the year-over-year drop was 45 percent — the most deterioration of any category. ARM share narrowed to 9.8 percent from 10.9 percent seven days earlier and 16.7 percent in the week ended Dec. 27, 2013.

A nearly 54 percent decline hit inquiries for refinances. But refinance activity strengthened 6 percent from the same week last year — the only improvement in year-over-year activity.

Refinance share, however, fell to 54.8 percent from 60.5 percent but increased from 48.5 percent one year prior. This most recent share reflected a 39.0 percent rate-term share and a 15.8 percent cashout share.

Inquiries for conventional loans dropped 51 percent for the week and were off 10 percent versus the same week in 2013.

Pricing inquiries for mortgages insured by the Federal Housing Administration were down more than 42 percent from the last report and off just 9 percent from 12 months previous. FHA share widened to 14.6 percent from 12.9 percent but wasn’t as wide as 15.1 percent in the year-earlier report.

Purchase inquiries saw the smallest week-over-week decline: less than 42 percent.
Purchase volume was off 18 percent compared to 12 months prior.

Impacting prior-period comparisons were 30-year fixed rates, which climbed to 4.280 percent from 4.205 percent. Conforming fixed rates, however, were better than 4.808 percent 12 months previous.

Fifteen-year fixed rates were 90 BPS better than 30-year rates. The spread grew from 84 BPS but wasn’t as wide as the 102-basis-point spread as of the same point last year.

Mortgage rates aren’t likely to be much different in the next Mortgage Market Index report based on Mortgage Daily’s analysis of Treasury market activity.

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