Deterioration in fixed rates helped keep new mortgage activity from improving this past week. Jumbo business was the worst performer as jumbo rates lost some of their edge.
After moving up for two consecutive weeks, the U.S. Mortgage Market Index from LoanSifter/Optimal Blue and Mortgage Daily for the week ended Aug. 1 stumbled — finishing the week at 169.
The index, which reflects average per-user product-and-pricing inquiries by LoanSifter clients, was off less than a percent from the prior week. Compared to the same week in 2013, the index has fallen 14 percent.
Inquiries for jumbo mortgages were off 3 percent from the week ended July 25, the biggest decline of any category. Still, jumbo business has ascended 16 percent from a year ago. Jumbo share of activity fell to 10.0 percent from 10.2 percent a week earlier but was fatter than 7.4 percent a year earlier.
Interest rates on jumbo loans were 11 basis points better than on conforming loans, though that wasn’t quite as good as the negative 12-basis-point jumbo-conforming spread in the previous report. But it was better than the positive 28-basis-point spread in the year-earlier report.
A more than 1 percent week-over-week decline was observed for refinance activity. Inquiries for refinances were down 20 percent from the week ended Aug. 2, 2013. Refinance share slipped to 45.8 percent from 46.0 percent and was down from 49.1 percent one year prior. The latest share consisted of a 30.1 percent rate-term share and a 15.7 percent cashout share.
Next were inquiries for conventional mortgages which drifted down 0.9 percent from seven days previous and have tumbled 23 percent from the same week last year.
After that was Federal Housing Administration business, with FHAÂ inquiries inching down 0.7 percent. Compared to 12 months earlier, FHA activity has diminished 8 percent. FHA share crept up to 16.1 percent from 16.0 percent and has widened from 14.8 percent at the same point last year.
Inquiries for purchase financing were off 0.6 percent and have descended 9 percent from this week in 2013.
The only category that with more activity than last week, albeit less than 1 percent more, was the adjustable-rate mortgage category. ARM activity was 1 percent more than one year previous. ARM share expanded to 10.9 percent from 10.8 percent and climbed from 9.2 percent in the year-earlier report.
Conventional 30-year fixed rates averaged 4.527 percent, rising from 4.492 percent in the previous report but lower than 4.659 percent one year previous.
Borrowers who inquired about 15-year mortgages were quoted rates that were an average of 96 BPS better than 30-year rates. The spread was unchanged from a week prior but wider than 91 BPS a year prior.
If Treasury market activity is any indication, interest rates on home loans are unlikely to be much different in the next Mortgage Market Index report.
Data from the Department of the Treasury indicate that the yield on the 10-year Treasury note averaged 2.53 percent during the week covered by the latest Mortgage Market Index report, while the 10-year yield closed at 2.52 percent Friday.
