As rates inched higher over the past week, new refinance activity tumbled. But recent developments in the United Kingdom are likely to reverse the latest activity.
The U.S. Mortgage Market Index from OpenClose and Mortgage Daily for the week ended June 24 was 157, an 11 percent decline from the week-earlier report.
Compared to the report from the same week a year earlier, the index — a measure of average per-user rate locks by clients of OpenClose — increased by 12 percent.
Refinance activity slowed 14 percent from the week ended June 17, the largest week-over-week decline of any category. Still, refinances rose by nearly a third from the same week in 2015 — the biggest year-over-year rise.
Refinance share was 67.6 percent, thinning from 69.6 percent in the previous report but widening from 57.3 percent in the year-previous report. This week’s share consisted of a 41.9 percent rate-term share and a 25.7 percent cashout share.
A 13 percent week-over-week retreat was recorded for rate locks on mortgages insured by the Federal Housing Administration, though FHA business was up 29 percent on a year-over-year basis.
FHA share was little changed at 25.2 percent versus 25.6 percent the prior week but was wider than 21.9 percent in the week ended June 26, 2015.
Conventional mortgage rate locks retreated 11 percent from the last report but were up 7 percent from the same week last year.
Rate locks for purchase financing slowed 9 percent for the week but improved by 4 percent from a year ago.
A 5 percent improvement was recorded for adjustable-rate mortgage activity, while the category gained 21 percent compared to a year prior.
ARM share was fatter at 9.1 percent compared to 7.7 percent a week earlier and 8.5 percent a year earlier.
With a 13 percent increase from the previous report, jumbo rate locks had the best week-over-week gain. Jumbo business, though, slipped 2 percent from this week last year. Jumbo share widened to 7.8 percent from 6.2 percent but was thinner than 8.9 percent 12 months earlier.
The jumbo-conforming spread widened to 7 basis points from 3 BPS in the last report. But the jumbo-conforming spread swung from a negative 7 BPS one year ago.
Fixed-rates on 30-year mortgages averaged 3.56 percent, 2 BPS higher than in the last report but 46 BPS better than in the year-earlier report.
A 73-basis-point spread between 15- and 30-year rates was no different than a week previous but was less than 81 BPS a year previous.
Based on a Mortgage Daily analysis of Treasury market activity, fixed interest rates on residential loans are likely to be roughly 11 BPS lower in the next Mortgage Market Index report.
The projected decline reflects global market turmoil over Great Britain’s exit from the European Union.
