For the third week in a row, an increase in cashout-driven refinance activity has been more than offset by deterioration in the volume of purchase financing activity.
An indicator of upcoming single-family originations, the U.S. Mortgage Market Index from Mortgage Daily, was 147 in the week ended Aug. 18.
The index, which is
based on average per-user rate locks at OpenClose, dipped less than a percent from a week earlier. No seasonal adjustments are made to the index.
Compared to the same week last year, the index has retreated 16 percent.
The biggest decline from the week ended Aug. 11 was with adjustable-rate mortgages: 22 percent.
ARM rate locks were up, however, 22 percent from 12 months ago. ARM share thinned to 10.5 percent from 13.3 percent but was far wider than 7.3 percent his week last year.
Rate locks for government mortgages fell 7 percent from the last report and dipped 5 percent from the week ended Aug. 19, 2016. Government share was trimmed to 36.2 percent from 38.7 percent but has widened from 32.1 percent one year earlier. This week’s share was made up of a 23.8 percent FHA share and a 12.4 percent VA share.
The Purchase MMI dipped 2 percent on a week-over-week basis to 93 and fell 6 percent on a year-over-year basis. Purchase business has declined each week since the week ended July 28.
Jumbo rate locks were up 2 percent from a week earlier but sank 18 percent from a year earlier. Jumbo share was 7.3 percent, slightly wider than 7.1 percent the prior week and slightly thinner than 7.5 percent a year prior. Jumbo rates were 7 basis points higher than conforming rates. The spread was more narrow than 8 BPS the preceding week and 10 BPS the same week in the preceding year.
A 3 percent gain was made from the previous report in refinance business. Refinance activity has risen each week since the week ended July 28.
But compared to the same week in 2016, refinance rate-lock volume has tumbled 29 percent. Refinance share widened slightly to 36.2 percent from 35.1 percent but was more narrow than 42.7 percent in the year earlier period. This week’s share consisted of a 17.3 percent rate-term share and a 19.0 percent cashout share — the widest cashout share since it was 19.4 percent in the week ended Jan. 13, 2017.
Rate locks for conventional products ascended from the previous report by 4 percent
— the biggest week-over-week increase of any category. Conventional business was down, though, 21 percent from one year ago.
