New mortgage activity increased for the second consecutive week likely due to anticipation of a rate hike next week by the Federal Reserve.
In the seven-day period that concluded on Dec. 9, the U.S. Mortgage Market Index from Mortgage Daily and OpenClose came in at 157.
The index, an indication of upcoming originations based on average per-user rate locks by OpenClose clients, climbed 22 percent from a week prior.
It was the second week in a row that business improved.
Compared to the same week last year, a 23 percent gain has been recorded for the index.
Rate locks for refinances leapt 43 percent from the week ended Dec. 2, 2016, leaving the Refinance MMI at 69. Refinance business was up 52 percent from the downwardly revised level one year previous. The week-over-week jump is odd given how rates have been consistently increasing as of late.
OpenClose Senior Vice President Vincent E. Furey III speculated about the refinance surge in a written statement.
“We saw a 13 percent decline in week over week new application activity but a surge in lock activity likely to preserve fundable pipeline and expectation of a Fed rate hike on Wednesday,” Furey said.
Refinance share was 43.9 percent in the most-recent week. The share widened from 37.4 percent a week earlier and a downwardly revised 35.6 percent a year earlier. This week’s share consisted of a
25.0 percent rate-term share and 19.0 percent cashout share.
Jumbo business climbed 31 percent from the last report but fell 24 percent from the week ended Dec. 11, 2015. Jumbo share widened to 4.7 percent from 4.4 percent but was more narrow than 7.6 percent in the same week during 2015. The jumbo-conforming spread thinned to a negative 7 basis points from a negative 13 BPS last week and a negative 16 BPS one year ago.
The Government MMI was 62, up 26 from a week earlier. Government share widened to 39.5 percent from 38.1 percent. This week’s share was comprised of a 29.4 percent FHA share and a 10.1 percent VA share.
A 19 percent week-over-week increase was recorded for conventional business, leaving the Conventional MMI at 95.
Rate locks for purchase financing increased 9 percent, with the Purchase MMI landing at 88. Purchase activity was up 7 percent from the upwardly revised level one year ago.
The only category to experience weakening was the ARM MMI, with rate locks for adjustable-rate mortgages falling 15 percent.
ARM business has tumbled 26 percent from this week in 2015. ARM share thinned to 8.1 percent from 11.6 percent a week earlier and 13.5 percent a year earlier.
