A week-over-week increase in new refinance business wasn’t quite enough to offset a decline in purchase activity. Adjustable-rate and jumbo activity accelerated.
At 175, the
U.S. Mortgage Market Index from OpenClose and Mortgage Daily for the week that ended on July 29 was off 1 percent from one week prior.
However, the index — which is a reflection of average per-user rate locks by clients of OpenClose –has increased by 31 percent compared to the same week in 2015.
The week’s biggest decline was with government business, which was down 11 percent from the week ended July 22, 2016.
Government share was trimmed to 30.3 percent from 33.7 percent. The most-recent share consisted of a 22.9 percent share for mortgages insured by the Federal Housing Administration and a 7.4 percent share for loan guaranteed by the Department of Veterans Affairs.
Rate locks for purchase financing retreated 6 percent from a week earlier but were up 5 percent from the week ended July 31, 2015.
Conventional mortgage activity inched up 4 percent from the last report.
A 7 percent week-over-week bounce was recorded for refinance business, while the category has soared 107 percent from the revised level a year earlier — the best year-over-year gain in activity of any category.
Refinance share was lifted to 40.1 percent from 37.0 percent a week earlier and the revised 25.4 percent a year earlier. The most-recent share was made up of a 25.6 percent rate-term share and a 14.5 percent cashout share.
Rate locks for jumbo mortgages climbed 17 percent but have fallen 29 percent from the same week last year — the worst year-over-year performance. Jumbo share widened to 8.7 percent from 7.4 percent but has thinned considerably from 16.0 percent a year ago.
Jumbo loan rates were 15 basis points more than conforming rates. The jumbo-conforming spread was more narrow than 18 BPS in the report issued seven days earlier and swung from a negative 18 BPS in the report from 12 months earlier.
The best week-over-week gain was made with adjustable-rate mortgages, with ARM rate locks climbing 18 percent for the week but drifting down 5 percent for the year.
ARM share was 7.1 percent, fatter than 6.0 percent in the week-prior report but thinner than 9.8 percent in the year-prior report.
Fixed interest rates on conforming
mortgages averaged 3.48 percent in the latest seven-day period, up 3 BPS from the last report but improved by 50 BPS from one year previous.
Fifteen-year loans had rates that were 70 BPS less than 30-year rates. While there was no change in the spread compared to one week previous, the spread has fallen from 81 BPS this week last year.
In the next Mortgage Market Index report, fixed rates are likely to be around 7 BPS lower based on a Mortgage Daily analysis of Treasury market activity.
