Mortgage activity declined in the holiday week, and government-insured business suffered the greatest loss. Mortgage rates dropped again, and jumbo rates remain less than conforming rates.
Reflecting the Memorial Day holiday, an 11 percent decline in new business from a week earlier was recorded for the week ended May 30, leaving the U.S. Mortgage Market Index from LoanSifter-Optimal Blue and Mortgage Daily at 165.
The index, which reflects average per-user pricing inquiries by clients of LoanSifter, has fallen by more than a third compared to the same week last year. No seasonal adjustments are made to the index.
Out front of last week’s decline were inquiries for Federal Housing Administration-insured loans, which dropped 19 percent from the week ended May 23. FHA business was down by 44 percent from the same week in 2013. FHA share fell to 14.2 percent from 15.6 percent a week earlier and 16.8 percent a year earlier.
Adjustable-rate mortgages had the next-biggest decline:Â 15 percent. Still, ARM activity was up 57 percent over the week ended May 31, 2013. ARM share slipped to 12.2 percent from 12.8 percent but remained far wider than 5.1 percent compared to one year prior.
Purchase financing activity was down by more than 14 percent both from the previous week and the year-earlier week.
A nearly 14 percent decline hit pricing inquiries for jumbo mortgages, though jumbo business was elevated by a third compared to 12 months prior. Jumbo inquiries accounted for 10.2 percent of overall business in the latest report, and jumbo share has more than doubled over the past year.
Jumbo interest rates were 8 basis points cheaper than conforming rates, narrowing from a negative 10-basis-point spread in the previous report. A year previous, jumbo mortgages were priced 30 BPS higher than conforming loans.
Inquiries for both conventional and refinance loans fell nearly 8 percent and have dropped 40 percent and 47 percent, respectively, on a year-over-year basis.
Refinance share climbed, however, to 48.5 percent from 46.7 percent but has narrowed from 60.4 percent in the same week last year. Last week’s refinance share consisted of a 34.5 percent rate-term share and a 14.0 percent cashout share.
Interest rates improved for the fifth consecutive week, with conforming 30-year fixed rates averaging 4.455 percent versus 4.515 percent seven days previous. Thirty-year rates were just 4.088 at the same point in 2013.
The benefit of choosing a 15-year mortgage diminished, with 15-year rates 98 BPS less than 30-year rates compared to 101 BPS in the previous report. But the spread has widened from 78 BPS in the year-earlier report.
