A holiday slump in new mortgage business was led by purchase financing. But, fueled by a dip in interest rates, refinance activity was up the second week in a row.
In the week ended Sept. 9, the U.S. Mortgage Market Index from OpenClose and Mortgage Daily — an indication of upcoming loan originations — was 169.
Compared to the report from the previous week, the index, a reflection of rate locks submitted by clients of OpenClose, moved lower by just over 1 percent.
But the modest decline during the week that included Labor Day was actually not bad given that there are no seasonal adjustments made to the index.
A 34 percent increase in the MMI, however, was recorded versus a year previous.
Leading the decline from the week ended Sept. 2, 2016, were rate locks for adjustable-rate mortgages, which tumbled 8 percent. ARM activity has plunged by nearly a third from the same week in 2015, the biggest year-over-year decline of any category.
ARM share dipped to 6.1 percent from 6.5 percent a week earlier and sank from 12.1 percent a year earlier.
Rate locks for purchase financing fell 5 percent from the prior report but inched up 3 percent from the revised level in the week ended Sept. 11, 2015.
A more than 2 percent decline from the previous week was recorded for the Government MMI. Government share, meanwhile, thinned to 28.8 percent from 29.1 percent. This week’s share was comprised of a 20.5 percent FHA share and an 8.3 percent VA share.
Off less than 1 percent on a week-over-week basis, the Conventional MMI landed at 120.
Jumbo rate locks rose a percent from the prior report and have ascended 46 percent from the same week in 2015. Jumbo share widened to 11.2 percent from 10.9 percent and was also fatter than 10.2 percent twelve months ago.
Jumbo interest rates were 3 basis points higher than conforming rates. The jumbo-conforming spread widened from 2 BPS in the last report and swung from a negative 24 BPS in the year-earlier report.
Outperforming all other categories was the Refinance MMI, which rose 3 percent from the previous week — when it was also higher. Compared to the revised level for the same week last year, refinance business has skyrocketed 115 percent — the most of any category.
Fixed rates on conforming 30-year mortgages averaged 3.44 percent in the latest report, down 2 BPS compared to a week previous and sinking 46 BPS from a year previous.
The spread between 15- and 30-year rates was trimmed to 68 BPS from 69 BPS and was slashed from 80 BPS as of one year prior.
A Mortgage Daily analysis of Treasury market activity points to a roughly 9-basis-point increase in mortgage rates in the next Mortgage Market Index report.
