As new mortgage business recovered from a holiday slump, the share of activity that was for refinances reached the widest level in more than three years.
A predictor of upcoming home-loan originations, the U.S. Mortgage Market Index from Mortgage Daily, landed at 121 for the week ended Jan. 12.
The index, which is based on average per-user rate-lock volume by clients of OpenClose, climbed 31 percent from the seven days that included New Year’s. No seasonal adjustments were made.
But compared
to the same seven days last year, the MMI has fallen 8 percent.
Leading the week-over-week improvement were rate locks for adjustable-rate mortgages — soaring by two thirds. ARM business was 63 percent higher than the same seven days in 2017. ARM share widened to 13.6 percent from 10.7 percent and has nearly doubled from 7.7 percent one year ago.
Refinance rate locks climbed 38 percent. Still, refinance volume dipped 3 percent from the week ended Jan. 13, 2017. Refinance share was 45.8 percent — the widest it’s been since it was 47.0 percent in the week ended June
27, 2014. The share was 43.3 percent last week and 43.5 percent a year ago. This week’s share was comprised of a 18.8 percent rate-term share and a 26.9 percent cashout share.
A one-third improvement from the last report was recorded for government rate locks, while the category was unchanged from this week last year. Government share broadened to 40.3 percent from 39.5 percent and was also thicker than 37.2 percent twelve months previous. Most recently, government share consisted of a 25.9 percent FHA share and a 14.4 percent VA share.
Next up was the Conventional MMI, which rose 29 percent to 72. Conventional business slowed 12 percent from the same report in 2017.
After that was the Purchase MMI, which improved 25 percent to 66. But purchase-money business has worsened by 11 percent on a year-over-year basis.
The week’s weakest category was the Jumbo MMI, which was up 13 percent but off 4 percent from one year prior. Jumbo share was trimmed to 9.2 percent from 10.7 percent but was still wider than 8.9 percent this week last year. Interest rates on jumbo mortgages were 29 basis points more than conforming rates quoted by Freddie Mac. The spread widened from 22 BPS a week earlier. A year ago, jumbo rates were 9 BPS lower than conforming rate.
