New mortgage activity moved minimally higher last week, with government business and adjustable-rate activity increasing the most. Stimulating the market were lower interest rates.
The U.S. Mortgage Market Index from LoanSifter/Optimal Blue and Mortgage Daily landed at 169 for the week ended Nov. 21. The index reflects average per-user pricing inquiries by LoanSifter clients.
New activity nudged up 2 percent from the previous report. But the index dipped 1 percent when compared to the same week in 2013.
Inquiries for loans insured by the Federal Housing Administration saw a 4.2 percent gain from the week ended Nov. 14 — the biggest increase of any category. FHA activity, however, was off by more than a quarter from one year earlier. FHA share increased to 15.1 percent from 14.8 percent but has diminished from 20.3 percent one year prior.
ARM activity moved up 4.1 percent for the week and has soared by nearly two-thirds compared to the week ended Nov. 22, 2013. The gain reflects an increased ARM share of 11.1 percent versus 10.9 percent a week earlier and 6.7 percent a year earlier.
Conventional business rose 2.7 percent on a week-over-week basis but declined 3.6 percent on a year-over-year basis.
A 2.6 percent gain from the previous report was recorded for jumbo business. Far more significant was the 168 percent surge in jumbo business from 12 months prior.
Jumbo share was virtually unchanged from seven days earlier at 10.9 percent but has widened significantly from 4.0 percent in the same week last year.
Jumbo loan applicants were quoted interest rates that were 7 basis points higher than on conforming loans. The jumbo-conforming spread eased from 9 BPS a week prior and plummeted from the 35-basis-pont spread in place at the same point in 2013.
Next were inquiries for purchase financing, which increased 2.4 percent from the previous report. But purchase activity has fallen 14 percent from 12 months prior.
The weakest category was refinance, with inquiries for refinance transactions up 2.1 percent for the week. Refinances, however, have risen 13 percent over the past year.
Refinance share didn’t really change at 53.9 percent but has widened from 47.2 percent in the year-earlier report. The latest share consisted of a 37.5 percent rate-term share and a 16.3 percent cashout share.
Thirty-year fixed rates averaged 4.337 percent in the most-recent report, slipping 3 BPS from the last report and retreating 18 BPS from the same week in 2013.
Fifteen-year fixed rates were 90 BPS better than their 30-year counterparts. The spread widened from 89 BPS in the prior report but narrowed from 95 BPS in the year-earlier report.
Little change is likely in fixed rates by the time the next Mortgage Market Index report roles around based on an analysis of Treasury market activity.
The 10-year Treasury yield, which is tracked by fixed mortgage rates, averaged 2.33 percent during the week encompassed by the latest index, based on Department of the Treasury data. The 10-year yield closed Friday at 2.31 percent.
