Although purchase financing drove overall new mortgage business lower this past week, an increase was recorded for refinances and jumbo loans as adjustable-rate mortgage activity surged.
Mortgage Daily’s U.S. Mortgage Market Index, an indication of upcoming home-lending activity based on per-user rate locks at OpenClose, was 147 in the week ended Aug. 11.
Volume retreated by 5 percent from the preceding seven-day period and sank by more than a fifth from the same seven days last year. There are no adjustments made for seasonal factors.
Rate locks for loans to finance a home purchase drove the week-over-week decline, tumbling 10 percent from the week ended Aug. 4 and leaving the Purchase MMI at 96. Purchase-money business was off just 8 percent, though, from the same week last year.
The Conventional MMI fell 6 percent from the previous report to 90. Conventional rate locks have fallen 26 percent from the week ended Aug. 12, 2016.
Government rate locks were off 3 percent from the last report and a 10th from a year prior. Government share widened to 38.7 percent from 37.9 percent a week ago and 34.0 percent this week a year ago. The latest week’s government share consisted of a 26.6 percent FHA share and a 12.1 percent VA share.
A 2 percent week-over-week gain was made with jumbo rate locks. But the Jumbo MMI plunged 38 percent from the same week in 2016 — the most year-over-year deterioration of any loan type. Jumbo share was 7.1 percent, a little thicker than 6.6 percent last week but thinner than 9.1 percent this week last year. Jumbo interest rates were 8 basis points more than conventional rates, widening from a 5-basis-point spread in the previous week but thinning from a 10-basis-point spread a year previous.
Rate locks for refinances rose 6 percent but have fallen 36 percent from one year ago. Refinance share was 35.1 percent, fatter than 31.3 percent in the prior week’s report but more narrow than 43.8 percent a year ago. This week’s share was made up of a 16.6 percent rate-term share and an 18.4 percent cashout share.
The biggest gainer from the last report was the volatile ARM MMI, which soared 41 percent. ARMs also had the healthiest increase from the 12 months ago: 58 percent. ARM share ballooned to 13.3 percent from 8.9 percent the prior week and 6.7 percent a year prior.
