While weekly new mortgage activity turned lower ahead of Christmas, there was a year-over-year gain. The share of prospective borrowers extracting cashout or opting for an adjustable-rate mortgage continued to grow.
Mortgage Daily’s U.S. Mortgage Market Index, which provides insight into upcoming loan originations based on average per-user rate locks by OpenClose clients, was 121 in the week ended Dec. 22.
The index, which is not adjusted to reflect seasonal factors, tumbled 17 percent versus the preceding week. But a more telling comparison is the year-over-year change: up 7 percent.
The Conventional MMI was 73, sinking from the week ended Dec. 15 by 19 percent —
more than any other category. Conventional business, though, increased 4 percent from the same seven days last year.
Rate locks for refinances declined 18 percent
but jumped 31 percent from the week ended Dec. 23, 2016. Refinance share dipped to 43.7 percent from 43.9 percent but was wider than 35.7 percent a year prior. This week’s share was made up of a 17.0 rate-term share and a 26.7 percent cashout share — far wider than 17.8 percent twelve months ago. The growing cashout share reflects rising home values that are giving homeowners more equity to draw from.
A 17 percent decline was recorded for
the Purchase MMI, which came in at 68. Purchase activity slowed 6 percent from this week in 2016.
Government rate locks dropped 16 percent but improved by 12 percent from the report a year ago. Government share was 39.9 percent, widening from 39.0 percent and also wider than 38.3 percent last year. Most recently, government share was comprised of a 25.7 percent FHA share and 14.2 percent VA share.
A 6 percent reduction was recorded for ARM rate locks, though they soared 29 percent from a year prior.
ARM share was 11.5 percent — more broad than 10.0 percent a week earlier and 9.5 percent a year earlier.
Rate locks for jumbo mortgages dipped 4 percent for the week. But jumbo activity has nearly doubled compared to a year ago — the strongest year-over-year improvement. Jumbo share widened to 8.7 percent from 7.5 percent and was also thicker than 4.8 percent this week in 2016. Rates on jumbo rate locks were 25 basis points higher than conforming rates in Freddie Mac’s Primary Mortgage Market Survey for the week ended Dec. 21. The spread increased from 20 BPS the prior week and less than a basis point a year prior.
