Home loan rates and mortgage business improved last week, and jumbo activity was out front as jumbo rates dug deeper below their conforming counterparts.
For the second week in a row, the U.S. Mortgage Market Index from LoanSifter/Optimal Blue and Mortgage Daily moved higher — finishing the week ended July 18 at 175.
Activity, which is based on average per-user pricing inquiries by clients of LoanSifter, increased 6 percent from the previous week but fell 18 percent compared to the same week last year.
A 10 percent week-over-week jump in jumbo activity was the biggest improvement of any category. Jumbo inquiries were 17 percent higher than the week ended July 19, 2013 — the largest year-over-year increase.
Behind the strong jumbo activity were increasingly competitive interest rates — which were 11 basis points less than conforming rates versus a negative jumbo-conforming spread of 8 BPS in the prior report. The spread swung from a positive 24 BPS a year earlier.
Pricing inquiries for adjustable-rate mortgages, which tend to track jumbo inquiries, climbed 8 percent from the week ended July 11 but slipped 2 percent from the year-earlier week. ARM share widened to 11.2 percent from 10.9 percent and was also better then 9.4 percent in the same week during 2013.
Refinance activity gained 7 percent on the previous week but was down more than a quarter on a year-over-year basis. Refinance share inched up to 46.6 percent from 46.3 percent but was down from 51.0 percent a year previous. Last week’s share consisted of a 30.9 percent rate-term share and a 15.7 percent cashout share.
Conventional activity, which is closely aligned with refinance activity, moved up 6 percent for the week but declined by a quarter from the same week last year.
Inquiries for purchase financing rose more than 5 percent but were down 11 percent from 12 months prior.
Federal Housing Administration-insured inquiries had the weakest week-over-week gain:Â less than 5 percent. FHAÂ business has slowed by 17 percent over the past year. FHA share, meanwhile, slipped to 15.9 percent from 16.1 percent but was up from 15.6 percent in the year-earlier report.
Conventional 30-year fixed rates averaged 4.511 percent, down from 4.524 percent in the previous report and 4.631 percent in the same report during 2013.
Fifteen-year mortgage rates were 97 BPS lower than 30-year rates, not as good as the 99-basis-point spread seven days earlier but wider than the 88-basis-point spread 12 months earlier.
Mortgage rates are poised to ease in the next report based on an analysis of weekly Treasury market activity.
The 10-year Treasury note yield, a benchmark for fixed mortgage rates, averaged 2.53 percent during the period covered by the latest Mortgage Market Index report, while it closed at 2.50 percent Friday, based on data reported by the Department of the Treasury. The movement suggests fixed mortgages rates could be around 3 BPS less in the next report.
