Fixed mortgage rates fell for the third week in a row, prompting loan originators and borrowers to rush out and lock in their refinance rates.
The U.S. Mortgage Market Index from OpenClose and Mortgage Daily was 145 in the week ended Aug. 7.
Compared to seven days prior, the index — a measure of average per-user price locks by OpenClose clients — ascended nine percent.
Activity, however, retreated 17 percent from the same week last year.
Out front of the week-over-week gain were locks for refinance transactions, which accelerated
24 percent. Refinances were also higher than in the week ended Aug. 8, 2014, with a five percent year-over-year increase recorded.
Refinance share jumped to 59.4 percent from 52.0 percent in the week ended July 31 and widened considerably from 47.3 percent in the year-earlier report. The most-recent share consisted of a 37.3 percent rate-term share and a 22.1 percent cashout share.
Rate locks for loans insured by the Federal Housing Administration increased 14 percent from the last report and were up 17 percent from the year-earlier report. FHA share was 21.5 percent, wider than 20.6 percent a week prior and 15.4 percent a year prior.
Next was adjustable-rate mortgage activity, which climbed nine percent but declined by more than a quarter from the same week in 2014 — the biggest year-over-year drop of any category. ARM share was just over 9.8 percent versus just under 9.8 percent the previous week and 11.0 percent in the same week during the previous year.
After that were rate locks for jumbo mortgages, which rose six percent and have soared 29 percent from 12 months earlier — the strongest year-over-year performance. Jumbo share, however, fell to 15.7 percent from 16.0 percent but was significantly wider than 10.2 percent one year prior.
Interest rates on jumbo loans were 14 basis points less than rates on conforming mortgages. The jumbo-conforming spread narrowed from a negative 18 BPS in the last report
but increased from a negative nine BPS in the year-earlier report.
A four percent rise was recorded for purchase financing, the weakest gain from a week prior. The category has tumbled 21 percent on a year-over-year basis.
Behind the surge in overall activity from the last report were declining fixed rates, with the average 30-year rate falling seven BPS to 3.91 percent. Rates have retreated each week since
the week ended July 17, when the average was 4.09 percent.
Twelve months earlier, 30-year rates averaged 4.51 percent.
Rates on 15-year mortgages were 78 BPS less than on 30-year loans. The spread thinned from 81 BPS in the previous report and 96 BPS in the year-earlier report.
Fixed mortgage rates could be around four BPS lower in next week’s report based on Mortgage Daily’s analysis of Treasury market activity.
