As was expected, new home-lending activity turned lower during the week that included the July 4th holiday. New jumbo business, however, actually accelerated.
At 167, the U.S. Mortgage Market Index from OpenClose and Mortgage Daily for the week that ended on July 8 was off 11 percent from a week earlier.
But the slowdown was insignificant since there were no seasonal adjustments made to the index, which is based on average per-user rate locks by OpenClose clients.
Compared to the same week in 2015, the index increased 22 percent.
Leading the week-over-week decline were rate locks for mortgages insured by the Federal Housing Administration, which tumbled more than a quarter. FHA business, though, was 12 percent stronger than in the week ended July 10, 2015. FHA share was cut to 20.3 percent from 24.3 percent in the prior report and 22.1 percent in the year-prior report.
A 24 percent decline from the week ended July 1 was recorded for purchase financing, while the category retreated 13 percent from the same week last year.
At 117, the Refinance MMI was down 19 percent from the report seven days previous. But refinance business strengthened 70 percent versus this week in 2015 — the biggest year-over-year gain of any category.
Refinance share thinned to 70.4 percent from 77.6 percent but was wider than 50.7 percent a year ago. This week’s share was comprised of a 46.4 percent rate-term share and a 24.0 percent cashout share.
Up next was conventional activity, which fell 6 percent for the week but was up a quarter for the year.
Rate locks for adjustable-rate mortgages slipped 4 percent from the last report and were down more than a fifth from the same week in 2015. ARM share increased to 6.2 percent from 5.7 percent but has been reduced from 9.6 percent twelve months ago.
With a 42 percent week-over-week gain, the Jumbo MMI was the only index that was higher. Still, jumbo business has slowed 38 percent from a year earlier — the worst year-over-year performance. Jumbo share was 6.3 percent compared to 3.9 percent in last week’s report and 12.3 percent a year ago.
Interest rates on jumbo mortgages were 12 basis points more than conforming rates, swinging from a negative 1-basis-point jumbo-conforming spread in the last report and a negative 17-basis-point spread 12 months ago.
Conforming 30-year fixed rates fell to 3.41 percent — the lowest level since the week ended Oct. 5, 2012.
Thirty-year rates averaged 3.48 percent in the last report and 4.04 percent in the year-earlier report.
Rates on 15-year loans were 67 BPS lower than 30-year rates. The spread was down from 70 BPS a week earlier and 84 BPS a year earlier.
A Mortgage Daily analysis of the yield on the benchmark 10-year Treasury — which fell to an all-time low of 1.37 percent Friday — indicates that fixed rates should be around 3 BPS lower in the next Mortgage Market Index report.
