Heading into the semi-holiday weekend, loan originators turned down the volume on new business. A bump in fixed rates dampened demand for refinances.
The U.S. Mortgage Market Index from LoanSifter and Mortgage Daily was 174 in the week ended April 18.
The index, which reflects average per-user pricing inquiries pulled by LoanSifter clients, moved down 8 percent from the previous week.
Activity has fallen by more than a third when compared to the same week in 2013.
Leading the decline were refinances, which tumbled 10 percent from the week ended April 11. Refinances have fallen 58 percent over the past year — also the biggest drop of any category.
Refinance share narrowed to 44.4 percent from 45.4 percent in the last report and has fallen sharply from 68.6 percent a year earlier. The most recent share was made up of a 30.3 percent rate-term share and a 14.1 percent cashout share.
Conventional mortgages, which tend to be most impacted by refinance activity, were 9 percent lower on a week-over-week basis and down 43 percent on a year-over-year basis.
Next were inquiries for Federal Housing Administration-insured mortgages, which dropped 7 percent and have declined by 29 percent compared to the week ended April 19, 2013. FHA share inched up to 15.7 percent from 15.6 percent and was wider than 14.4 percent in the same week during 2013.
A 5.9 percent week-over-week reduction in purchase financing activity was somewhat offset by the 15 percent year-over-year gain.
Inquiries for adjustable-rate mortgages retreated 5.8 percent for the week. But ARM business has soared by 79 percent compared to the same week last year — the best year-over-year performance of any category.
ARM share rose to 13.7 percent from 13.4 percent and was just 5.0 percent one year ago.
The best performance versus last week was with jumbo mortgages, with activity off less than 2 percent. Jumbo business remains 10 percent stronger than a year earlier.
Jumbo inquiries accounted for 10.6 percent of all inquiries. Jumbo share rose from 10.0 percent a week earlier and 6.3 percent a year earlier.
Inquiries for jumbo mortgages were stimulated by interest rates that were 2 basis points better than conforming rates. The spread in the previous report was less than one negative basis point, while the year-earlier number was a positive 29 BPS.
Conforming 30-year fixed rates averaged 4.661 percent, up from the previous week’s 4.648 percent. In the same week during 2013, the average was 3.701 percent.
Inquiries for 15-year mortgages yielded rates that were 102 BPS better than 30-year rates, the same spread as last week. But the spread has improved from 74 BPS twelve months prior.
Mortgage rates are likely to be around 6 BPS worse in next week’s report based on this week’s Treasury market activity. Data from the Department of the Treasury indicate that the 10-year Treasury note yield — a benchmark for fixed mortgage rates — averaged 2.67 percent during the week covered by the Mortgage Market Index report. The 10-year yield closed at 2.73 percent Thursday.
