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Weekly Mortgage Refinance Biz Up, Purchases Down

Mortgage News

Declining interest rates helped drive up refinance activity but weren’t enough to lift the level of purchase financing. Government-insured business took a big hit.

At 177, the U.S. Mortgage Market Index from OpenClose and Mortgage Daily for the week ended June 17 retreated 2 percent compared to the prior week.

But a year-over-year improvement of one-third
was recorded for the index, which is a representation of average per-user rate locks by clients of Open Close.

Figures for a year earlier were revised to reflect statistics from the same data provider.

The biggest decline from the week ended June 10 was with rate locks for mortgages insured by the Federal Housing Administration: 10 percent. Compared to the same week in 2015, however, FHA activity increased 44 percent. FHA share was trimmed to 25.6 percent from 27.7 percent but was wider than 23.7 percent this week last year.

The Purchase MMI fell 8 percent from the last report but was 16 percent stronger than in the week ended June 19, 2015.

A 4 percent week-over-week reduction was recorded for adjustable-rate mortgage business, though the category was up by 9 percent from a year ago. ARM share slipped to 7.7 percent from 7.9 percent and was cut from 9.5 percent the same week 12 months previous.

Conventional activity crept up less than a percent for the week and increased 30 percent for the year.

The Refinance MMI rose 7 percent from the report seven days earlier and was 72 percent higher than 12 months earlier. Refinance share widened to 69.6 percent from 63.2 percent and was also fatter than 53.8 percent a year ago. This week’s refinance share was comprised of a 44.1 percent rate-term share and a 25.5 percent cashout share.

The best-performing category in the latest report was jumbo, with rate locks for jumbo mortgages rising 22 percent from a week prior but sinking by the same percentage from a year prior. Jumbo share climbed to 6.2 percent from 5.0 percent but thinned significantly from 10.6 percent in the report from 12 months ago.

Jumbo interest rates were
3 basis points more than conforming rates, about the same jumbo-conforming spread as in the last report but much thinner than 12 BPS in the year-earlier report.

Interest rates on residential loans continued to decline, with 30-year fixed rates falling 6 BPS from last week to 3.54 percent.
Thirty-year rates were 4.35 percent one year previous.

Fifteen-year mortgages were priced 73 BPS less than 30-year rates, the same spread as a week prior. In the same week last year, the spread was 91 BPS.

Mortgage rates are unlikely to be much different in next week’s Mortgage Market Index report based on an analysis of Treasury market activity by Mortgage Daily.

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