Driven by refinance transactions, new mortgage activity retreated this past week. While adjustable-rate business was down the most, the category had the biggest year-over-year gain.
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predictor of upcoming single-family loan originations, the U.S. Mortgage Market Index from Mortgage Daily, was 139 during the seven-day period ended Sept. 22.
The index, which is determined based on average per-user rate-lock volume by clients of OpenClose, declined 3 percent from the previous week. No seasonal adjustments were made.
Compared to the same seven days last year, the index tumbled 18 percent.
The biggest reduction in activity was rate locks for adjustable-rate mortgages — sinking 20 percent. Still, ARM activity has skyrocketed 65 percent over the past year — giving the category the largest year-over-year improvement. ARM share was 12.0 percent, more narrow than 14.6 percent last week but far wider than 6.0 percent twelve months ago.
Driving the week-over-week deterioration in overall activity were refinance rate locks, which dropped 7 percent. Refinance business has slowed 23 percent from the week ended Sept. 23, 2016. Refinance share thinned to 38.6 percent from 40.2 percent a week earlier and 41.1 percent a year earlier. This week’s share was comprised of an 18.7 percent rate-term share and a 19.9 percent cashout share.
Rate locks for government loans fell 3 percent from the week ended Sept. 15 but increased 3 percent from the same week in 2016. Government share was trimmed to 38.8 percent from 39.0 percent in the last report but widened from 30.9 percent this week a year ago. The latest share consisted of a 25.2 percent FHA share and a 13.6 percent VA share.
Next up was the Conventional MMI, which dipped 2 percent to 85. Conventional business has tumbled 27 percent from one year ago — more than any other category.
Jumbo rate locks slipped a percent and tumbled 21 percent from the year-earlier week. Jumbo share was 7.9 percent, slightly wider than 7.7 percent a week earlier but thinner than 8.2 percent a year earlier. Interest rates on jumbo mortgages were 11 basis points higher than conforming rates, widening from a 10-basis-point jumbo-conforming spread in the last report and 8 BPS a year prior.
At 85, the Purchase MMI was unchanged from last week’s report — the best week-over-week performance. Purchase-money activity has fallen 14 percent from the same week in 2016.
