New mortgage activity leapt to the highest level in nine months as interest rates continued to improve. The impressive gain was fueled by a surge in refinance transactions, though jumbo activity also helped.
At 161, the U.S. Mortgage Market Index from OpenClose and Mortgage Daily for the week ended Feb. 5 was higher than it’s been during any week since it was 170 in the week ended April 24, 2015.
The index, a reflection of average per-user rate locks submitted by OpenClose clients,
was 35 percent higher than in the previous report. Compared to the year-earlier report, however, it was off 31 percent.
Numbers for a year earlier were revised to reflect statistics from the same data provider.
The biggest week-over-week gain came from the jumbo category, with the Jumbo MMI skyrocketing 55 percent to 13. Jumbo activity was down, though, 44 percent from the week ended Feb. 6, 2015. Jumbo share widened to 8.0 percent from 7.0 percent in the last report but thinned from 9.8 percent in the year-earlier report.
Jumbo
interest rates came in 20 basis points lower than conforming rates. The jumbo-conforming spread widened from a negative 18 BPS the prior week and swung from a positive 17 BPS in the same week last year.
Refinance rate locks leapt 45 percent from the week ended Jan. 29, 2016, leaving the Refinance MMI at 131. But refinances retreated 18 percent from one year ago. Refinance share was 81.3 percent,
widening from 75.8 percent a week earlier and 68.5 percent a year earlier. This week’s share was made up of a 50.9 percent rate-term share and a 30.4 percent cashout share.
A 37 percent week-over-week gain was recorded for conventional activity, while there was a 37 percent year-over-year decline for the category.
Rate locks for mortgages that are insured by the Federal Housing Administration rose 29.5 percent from seven days previous but were off 6 percent from 12 months previous. FHA share thinned to 24.8 percent from 25.8 percent but was still much fatter than 18.0 percent the same week last year.
Purchase financing activity climbed 29.0 percent from the prior week but slipped 6 percent from the same week in the prior year.
The only category to suffer a week-over-week loss was adjustable-rate mortgages, with ARM activity slowing 13 percent. ARM rate locks were down by nearly half from this week in 2015. The retreat reflects improving fixed rates, making ARMs less attractive.
ARM share was just 6.3 percent, cut from 9.7 percent in the previous report and 8.5 percent a year previous.
Interest rates on 15-year mortgages were 71 BPS better than on 30-year loans. The spread was slightly more narrow than 72 BPS in the week-prior report and much thinner than 82 BPS in the year-prior report.
An analysis of Treasury market activity by Mortgage Daily suggests that fixed rates could be around four BPS lower in the next Mortgage Market Index report.
