Interest rates on home loans improved, but apparently not enough to drive up new mortgage business. Government-insured activity led the decline, while jumbo business inched higher.
The U.S. Mortgage Market Index from LoanSifter/Optimal Blue and Mortgage Daily was 126 in the week ended June 19.
Compared to a week earlier, the index — a reflection of average per-user product-and-pricing inquiries by LoanSifter clients — was down six percent.
A nearly one-quarter decline was recorded versus a year earlier.
The week-over-week deterioration was led by inquiries for loans insured by the Federal Housing Administration, with activity slowing 11 percent from the week ended June 12. FHA business was off by 9 percent from one year prior — the smallest year-over-year drop. FHA share declined to 19.4 percent from 20.4 percent but was wider than 16.0 percent this week in 2014.
Purchase financing slowed 8 percent and fell by a third from the week ended June 20, 2014.
After that were inquiries for adjustable-rate mortgages, which fell more than five percent from a week earlier and tumbled 36 percent from a year earlier. ARM share inched up, however, to 9.4 percent from 9.2 percent but slid from 11.1 percent 12 months prior.
Next was refinance business, which slowed less than five percent. Refinance inquiries were off 14 percent from a year ago. Refinance share fattened to 51.4 percent from 50.5 percent and was
also wider than 45.3 percent a year previous. Refinance share consisted of a 34.1 percent rate-term share and a 17.3 percent cashout share.
A four percent decline was recorded for conventional activity, while the category was down 28 percent for the year.
The only category to show a gain, jumbo, was up one percent from the last report. Jumbo business, though, was off 16 percent from the year-earlier report. Jumbo share increased to 11.2 percent from 10.4 percent and also widened from 10.1 percent in the same week during 2014.
Interest rates on jumbo mortgages were 12 basis points higher than on conforming loans. The jumbo-conforming spread was up from 10 BPS in the last report but swung from a negative 9 BPS in the year-prior report.
Conventional 30-year fixed rates slipped two BPS to 4.354 percent
and were also down from 4.535 percent at the same point in 2014.
Customers who opted for shorter, 15-year mortgages were quoted rates that were 91 BPS better than on 30-year loans. The spread increased from 87 BPS in the last report but slid from 97 BPS one year earlier.
A Mortgage Daily analysis of Treasury market activity during the period covered by the Mortgage Market Index suggests interest rates on residential loans could be around six BPS better in the next report. The drop was fueled by uncertainty about Greece’s ability to work out a deal on its debt with creditors ahead of a potential default.
