An improvement in interest rates on home loans prompted a rush of refinance activity, though overall weekly mortgage business slipped.
A three percent decline from the previous week left the U.S. Mortgage Market Index from OpenClose and Mortgage Daily at 136 in the week ended Sept. 25.
Compared to a year previous, the index — a measure of average per-user rate locks by OpenClose clients — was down 16 percent. Year-earlier figures were revised to reflect numbers from the same data provider.
Leading the decline from the week ended Sept. 18 was adjustable-rate mortgage activity, which fell 13 percent. ARM business has slowed by more than a quarter from this week last year. ARM share fell to 10.5 percent from 11.8 percent and was also off from 11.9 percent a year prior.
The next-biggest week-over-week drop was with rate locks for purchase financing: 10 percent. Purchase activity was down 26 percent from the week ended Sept. 26, 2015.
After that were rate locks for jumbo mortgages, declining nine percent from the last report. Jumbo business was off five percent on a year-over-year basis. Jumbo share thinned to 12.8 percent from 13.7 percent but has widened from 11.3 percent one year prior.
Jumbo mortgage rates were 17 basis points less than their conforming counterparts. The jumbo-conforming spread narrowed from a negative 22 BPS a week earlier but was much fatter than a negative four BPS a year earlier.
A four percent decline from one week prior was recorded for conventional business, while the category has fallen 19 percent from this week last year.
Bucking the overall trend were rate locks for mortgages insured by the Federal Housing Administration, inching up nearly one percent for the week and three percent better than 12 months previous. FHA share increased to 19.0 percent from 18.4 percent and was just 15.6 percent one year prior.
An even more staunch performance was delivered by the refinance category, which was 21 percent better than in the prior report. Refinance rate locks have accelerated 29 percent versus the same week in 2014.
Refinance share soared to 74.2 percent from 59.8 percent and was also much wider than 48.4 percent in the year-earlier report. The latest refinance share consisted of a 45.2 percent rate-term share and a 29.0 cashout share.
Conventional, conforming fixed rates averaged 3.86 percent in the latest report, retreating five BPS from seven days prior and 66 BPS better than 12 months prior.
Borrowers who opted for 15-year mortgages were treated to rates that were 78 BPS lower than 30-year rates.
The spread was down from 80 BPS in the last report and 90 BPS in the year-earlier report.
A Mortgage Daily analysis of Treasury market activity points to little change in fixed rates in the next report, though rates could nudge higher.
