As falling interest rates drove up refinance and jumbo business, overall new mortgage activity soared to the highest level in more than a year.
The
U.S. Mortgage Market Index from OpenClose and
Mortgage Daily landed at 200 in the week that came to an end on May 6.
The index, which is
a reflection of average per-user rate locks by clients of OpenClose, was last this high in the week ended March 27, 2015.
Activity accelerated 27 percent from a week previous.
Compared to a year previous, new mortgage business ascended 28 percent. Year-prior numbers were revised to reflect statistics from the same data provider.
Leading the pack this past week was jumbo business, with the Jumbo MMI climbing 56 percent from the week ended April 29. Jumbo business, however, fell 35 percent from the same week in 2015. Jumbo rate locks accounted for 6.6 percent of the latest activity. Jumbo share was up from 5.4 percent a week earlier but plummeted from 13.0 percent a year earlier.
Interest rates on jumbo mortgages were 3 basis points less than conforming rates, swinging from a positive 2-basis-point spread in the last report and a positive 17 BPS a year ago.
Rate locks for refinances soared 49 percent on a week-over-week basis and were up nearly that much, 47 percent, on a year-over-year basis — the biggest gain from the week ended May 8, 2015.
Refinance share shot up to two-thirds from 56.8 percent the prior week and 58.0 percent a year prior. The most-recent share consisted of a 42.5 percent rate-term share and a 24.1 percent cashout share.
A 28 percent rise from the previous week was recorded for conventional business, while the category was up 23 percent from this week in 2015.
Rate locks for mortgages insured by the Federal Housing Administration increased a quarter from the previous week and were up nearly 47 percent from the same week a year previous. FHA share slipped to 26.3 percent from 26.8 percent but widened from 23.0 percent twelve months earlier.
The Purchase MMI was 93 in the latest report, rising 17 percent for the week. Purchase business has ascended 23 percent from one year previous.
Adjustable-rate mortgages were the only loan type to experience a decline from the last report, falling 12 percent. ARM rate locks receded 23 percent for the year. ARM share was slashed to 7.9 percent from 11.4 percent a week earlier and 13.1 percent a year earlier.
ARM activity slowed as fixed mortgage rates declined — with conforming 30-year fixed rates dropping to 3.61 percent from 3.66 percent in the prior report and sinking from 4.16 percent in the year-prior report.
Rates on 15-year mortgages were 75 BPS less than 30-year rates. The spread was down from 77 BPS seven days earlier and 85 BPS a year earlier.
A Mortgage Daily analysis of Treasury market activity suggests that fixed rates on residential loans are likely to be approximately 5 BPS lower in the next Mortgage Market Index report.
