The Martin Luther King Jr. holiday put a damper on new mortgage business, though falling interest rates helps mitigate the decline. Rates are positioned for a further decline.
A 9 percent drop from a week earlier left the U.S. Mortgage Market Index from LoanSifter and Mortgage Daily at 157 for the week ended Jan. 24.
The index, which is based on average per-user pricing inquiries by LoanSifter customers, has fallen 37 percent from a year ago. In order to maintain numbers from the same data provider, the year-earlier figures were revised.
Inquiries for mortgages insured by the Federal Housing Administration fell 12 percent from the week ended Jan. 17, the biggest drop of any category. FHAÂ business was 38 percent lower than the same week last year.
Almost 15.8 percent of the latest activity was FHA, down from 16.3 percent in the previous report. FHAÂ share was also lower than 16.1 percent 12 months earlier.
Refinance business declined 10 percent on a week-over-week basis and has plunged 59 percent from the week ended Jan. 25, 2012.
Refinances represented 48.7 percent of the latest week’s activity, slimmer than 49.5 percent in the last report and far thinner than the 74.4 percent share in the year-earlier report. The latest share was comprised of a 34.2 percent rate-term share and a 14.5 percent cashout share.
The next biggest decline was with conventional inquiries, which were down 9 percent for the week and 45 percent for the year.
After that were inquiries for purchase financing, which retreated 7 percent but still came in more than a quarter higher than a year earlier.
Jumbo mortgage inquiries declined 5 percent from the last report but were also up more than a quarter from a year earlier. Jumbo share inched up to 9.5 percent from 9.2 percent and was around double the level that it stood in the same week during 2013.
The jumbo-conforming spread slipped to just under 13 basis points from just over 13 BPS in the prior week and sank from 36 BPS in the year-earlier report.
The best performance of the week was turned in by the adjustable-rate mortgage category, with ARM activity off just 3 percent from last week. Inquiries for ARMs soared by 128 percent from 12 months prior.
ARM share, meanwhile, increased to 12.5 percent from 11.8 percent in the previous report. ARMs accounted for just 3.5 percent of activity 12 months prior.
Thirty-year fixed rates averaged 4.690 percent, falling from 4.707 percent on concerns about Argentina’s currency and China’s slowing economic growth. In the same week during 2013, the 30 year averaged 3.697 percent.
Fifteen-year rates were 97 BPS better than 30-year rates, improving from the 96-basis-point spread in the last report. The latest spread was much better than the 65 BPS in place a year ago.
Mortgage rates have around 7 BPS more to go, based on this week’s Treasury market activity.
Fixed rates tend to track the yield on the 10-year Treasury note, which averaged 2.82 percent this week, according to Treasury Department data. The 10-year yield closed at 2.75 percent Friday.
