The jumbo-conforming spread significantly improved but didn’t slow the more than one-half drop in jumbo business. An overall rate decline also didn’t help overall activity. Adjustable-rate and cashout-refinance business, however, jumped.
At 113 for the week ended Aug. 21, the U.S. Mortgage Market Index from OpenClose and Mortgage Daily was down by a fifth from seven days earlier.
Compared to a year earlier, the index — a reflection of average per-user price locks by clients of OpenClose — has tumbled by more than a third.
Vince Furey, senior vice president of lending solutions at OpenClose, explained in a written statement that business slowed due, “in part, to market volatility (improving) and end of summer vacations.”
Out front of the week-over-week decline were price locks for jumbo mortgages, which sank 53 percent from the week ended Aug. 14. Jumbo business also had the worst year-over-year slump: 40 percent.
Jumbo share slid to 9.7 percent from 16.5 percent in the week-earlier report and 10.6 percent in the year-earlier report.
The dismal jumbo activity is odd given that the spread widened to a negative 25 basis points from a negative 19 BPS in the last report. The jumbo-conforming spread swung from a positive two BPS in the same week last year.
Price locks for mortgages insured by the Federal Housing Administration tumbled 21 percent from the previous report and were down 15 percent from the week ended Aug. 22, 2014. FHA share thinned to just under 20.0 percent from 20.3 percent but was wider than 15.4 percent in the year-earlier report.
Purchase financing activity was down 21 percent from seven days prior and 39 percent worse than 12 months prior.
A 19 percent week-over-week decline was recorded for conventional business, and the year-over-year drop exceeded 38 percent.
Rate locks for refinances fell nine percent and were off 11 percent from the year-previous week. Total refinance share widened to exactly two thirds from 58.9 percent in the week previous and 48.8 percent in the same week during 2014.
Most recently, refinance share consisted of a 40.7 percent rate-term share and a 25.8 percent cashout share — surging from just 19.5 percent in the prior report.
The only category to show improvement was the adjustable-rate mortgage category, with ARM locks climbing 10 percent from one week prior. But ARM business still slowed 29 percent from the same report in 2014.
ARM share increased to 11.6 percent from 8.5 percent a week earlier and 10.7 percent a year earlier.
Fixed rates on conforming 30-year mortgages averaged 3.93 percent, off a basis point from the last reading and 56 BPS better than in the same week last year.
Fifteen-year rates were 78 BPS less than 30-year rates. The spread widened from 77 BPS though it was far more narrow than 96 BPS one year prior.
Mortgage rates could be around seven BPS lower in the next Mortgage Market Index report based on Mortgage Daily’s analysis of Treasury market activity.
