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Refinances Overcome Holiday

Mortgage News

Despite a four-day holiday week, there was a healthy ascension in new refinance business. New jumbo activity had the strongest week-over-week increase.

The U.S. Mortgage Market Index from OpenClose and Mortgage Daily was 130 in the week that ended on Feb. 24, which included Presidents Day.

Compared to the prior week, the index — an indication of upcoming originations based on average per-user OpenClose rate-lock volume — was up 5 percent.

No adjustments are made to the MMI for seasonal variations.

Business was down by a quarter from the same week last year.

Rate locks for jumbo mortgages climbed 22 percent from the week ended Feb. 17 — the most of any category. Jumbo volume was 15 percent higher than a year previous. Jumbo share widened to 6.9 percent from 6.0 percent a week earlier and 4.5 percent a year earlier.

Rates on jumbo mortgages were 10 basis points lower than conforming rates, widening from a negative 6 BPS in the last report. The jumbo-conforming spread was also more broad than a negative 7 BPS
twelve months prior.

An 18 percent week-over-week improvement was recorded for refinance activity, though the Refinance MMI tumbled 38 percent from the downwardly revised level in the week ended Feb. 26, 2016. Refinance share widened to 34.4 percent from 30.7 percent the previous week but was thinner than the downwardly revised 41.8 percent the same week in the previous year. The most-recent share consisted of an 18.6 percent rate-term share and a 15.8 percent cashout share.

The Government MMI was 50, rising 7 percent from the prior report. Government share widened to 38.1 percent from 37.4 percent. The latest share was made up of a 27.9 percent FHA share and a 10.2 percent VA share.

Rate locks for conventional loans increased 4 percent, leaving the Conventional MMI at 81.

A less than 1 percent week-over-week drop was recorded for the Purchase MMI, which slipped to 85. Purchase activity fell 16 percent from the upwardly revised level the same week a year ago.

Rate locks for adjustable-rate mortgages declined from the previous week by 24 percent — the biggest drop. ARM business sank from a year earlier by 41 percent — also the biggest year-over-year loss. ARM share was cut to 7.8 percent from 10.8 percent a week prior and 9.9 percent a year prior.

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