A dip in interest rates prompted more prospective borrowers to shop around for loan products. Leading the rise were refinance and jumbo activity.
A 5 percent increase from last week put the U.S. Mortgage Market Index from LoanSifter-Optimal Blue and Mortgage Daily for the week ended Friday at 185.
Compared to the same week in 2013, the index — which moves based on average per-user pricing inquiries at LoanSifter — has retreated 39 percent.
Out front were inquiries for refinances, which increased more than 7 percent from the week ended April 25. But refinance activity has tumbled 63 percent from one year earlier.
Refinance share widened to 43.6 percent from 43.0 percent in the last report but was nowhere near the 71.2 percent in place this week last year. The most recent share was made up of a 29.6 percent rate-term share and a 14.1 percent cashout share.
The next-biggest mover was the jumbo category, with jumbo activity rising nearly 7 percent. Jumbo business has moved up 10 percent from the week ended May 3, 2013. Jumbo share rose to 10.1 percent from 10.0 percent and was only 5.6 percent one year ago.
Jumbo rates were a basis point less than conforming rates, swinging from a positive 3-basis-point spread in the last report. The jumbo-conforming spread was 33 BPS 12 months prior.
Conventional business was up less than 7 percent and has plunged 49 percent from a year earlier.
Next were inquiries for purchase financing, growing 4 percent from last week and 19 percent better than this week last year.
After that was the adjustable-rate mortgage category, which was up 3 percent on a week-over-week basis had 76 percent higher on a year-over-year basis — the best performance of any category compared to a year earlier.
Inquiries for Federal Housing Administration-insured loans edged up 1 percent over the prior seven days but has retreated 28 percent over the prior 12 months. FHAÂ share fell to 15.4 percent from 16.1 percent and was just 13.0 percent in the year-earlier period.
New activity strengthened as conforming 30-year fixed rates fell to 4.631 percent from 4.682 percent in the last report. But 30-year rates were well above 3.643 percent a year ago.
Fifteen-year mortgages were priced 100 BPS better than 30-year loans. The spread was the same as last week and much wider than 75Â BPS one year prior.
It looks like interest rates could be another 6 BPS or so lower in the next report based on this week’s Treasury market activity.
Department of the Treasury data indicate that the yield on the 10-year Treasury note averaged 2.66 percent this week, while it closed at 2.60 percent Friday.
The decline in the Treasury yield came despite a solid employment report as investors were likely concerned about a weaker workforce participation rate.
