A combination of rising interest rates and the holiday season drove the U.S Mortgage Market Index to the lowest level it’s been in its seven-year history.
The index,
an indication of upcoming mortgage originations based on average per-user rate locks by OpenClose clients, was 80 in the week ended Dec. 30.
That was the lowest level on record for the MMI, which is not adjusted for seasonal factors, since it was launched by Mortgage Daily in December 2009.
Compared to the previous week, the index declined 29 percent. It was also down 7 percent from the same week a year ago.
Rate locks for adjustable-rate mortgages took the biggest hit, declining 35 percent from the week ended Dec. 23, 2016. ARM business slowed 62 percent from a year prior. ARM share thinned to 8.6 percent from 9.5 percent and was sliced by more than half from 21.3 percent one year prior.
The Government MMI was 29, tumbling a third from the last report. Government share thinned to 36.4 percent from 38.3 percent. This week’s share was comprised of a 28.9 percent FHA share and a 7.5 percent VA share.
Rate locks for purchase financing slowed 30 percent from a week earlier and were down 12 percent from the upwardly revised level in the week ended Jan. 1, 2016.
A 26.8 percent week-over-week decline left the Conventional MMI at 51.
The Refinance MMI fell 26.6 percent from the report seven days earlier. Refinance activity, however, was up 3 percent from the downwardly revised level a year earlier. Refinance share widened to 36.9 percent from 35.7 percent the prior week and the upwardly revised one-third share a year prior. The most-recent share consisted of an 18.7 percent rate-term share and an 18.1 percent cashout share.
The smallest week-over-week decline was experienced by the Jumbo MMI, which slipped 6 percent from a week earlier and a year earlier. Jumbo share widened to 6.3 percent from 4.8 percent and was mostly unchanged from the year-earlier report.
Rates on jumbo mortgages were 4 basis points lower than rates on conforming loans. The jumbo-conforming spread widened from 0.0 percent in the last report and thinned from a negative 19 BPS the same week last year.
