Despite an improvement in interest rates, new mortgage activity slumped this past week — and jumbo mortgage business led the decline.
A 9 percent drop from the previous week left the U.S. Mortgage Market Index from LoanSifter/Optimal Blue and Mortgage Daily at 235 for the week ended Feb. 6.
The weakening in new mortgage activity came as Americans flocked to their televisions to watch the New England Patriots defeat the Seattle Seahawks in the 2015 Superbowl.
Compared to the same week in 2014, the index — a reflection of average per-user product-and-pricing inquiries by LoanSifter clients — was up by more than a third.
Taking the biggest dive were inquiries for jumbo mortgages, which were down more than 12 percent from the week ended Jan. 30. Jumbo business, however, was up 40 percent from a year earlier. Jumbo share fell to 9.8 percent from 10.2 percent but was up from 9.5 percent in the year-earlier report.
Jumbo interest rates were 17 basis points more than conforming rates. The jumbo-conforming spread thinned from 20 BPS in the previous report but has widened from 12 BPS one year prior.
Inquiries for adjustable-rate mortgages fell 11 percent and were down 6 percent from the week ended Feb. 7, 2014. ARM share narrowed to 8.7 percent from 8.9 percent and has tumbled from 12.7 percent 12 months earlier.
Next were refinance inquiries, which dropped 10 percent on a week-over-week basis but were up 80 percent on a year-over-year basis.
Refinance share fell to 68.6 percent from 69.2 percent but was fatter than 51.7 percent at the same point in 2014. The latest share consisted of a 53.6 percent rate-term share and a 15.0 percent cashout share.
Conventional business declined 9 percent from the previous week but was up by nearly a third from the same week in 2014.
An 8 percent decline was recorded for purchase financing, while the category was off 12 percent from the year-earlier period.
The smallest week-over-week retreat was with inquiries for loans insured by the Federal Housing Administration, which were off 6 percent. Still, FHA activity has soared 72 percent from a year previous. FHA share climbed to 18.1 percent percent from 17.4 percent a week earlier and 14.3 percent a year earlier.
Conforming 30-year fixed rates averaged 3.974 percent, easing from the previous week’s 3.993 percent and sinking from 4.598 percent 12 months prior.
Rates on 15-year mortgages were 82 BPS better than on 30-year loans. The spread widened from 81 BPS in the prior report but narrowed from 98 BPS in the year-prior report.
Mortgage Daily’s analysis of weekly Treasury market activity suggests that fixed rates could be around 14 BPS higher in the next Mortgage Market Index report.
