Despite a slight retreat in loan pricing inquiries this week that was fueled by less interest in Federal Housing Administration mortgages, jumbo business was better. Helping to pump up jumbo activity was more competitive pricing versus conforming loans — as was the case for 15-year mortgages. Rates were lower and could slip a little further.
It was a 2 percent decline from last week for the U.S. Mortgage Market Index from Mortech Inc. and Mortgage Daily, which finished the seven days ended April 27 at 202.494.
There was also little change from the week ended April 29, 2011, when the index was 203.
FHAÂ inquiries had the biggest decline, falling 4 percent from last week. FHA endorsements tumbled 29 percent from a year earlier.
More than 11 percent of this week’s total activity was government business. While there was little change in share from last week, FHA share was lower than the 16 percent during this week last year.
Pricing inquiries for purchase financing had a 3 percent week-over-week reduction and around a one-third year-over-year drop.
A 1 percent weekly decline was recorded for both refinance and adjustable-rate mortgage inquiries. But refinances were up 40 percent from the year-earlier period, while ARM activity was off 56 percent.
Refinance share inched up to 64 percent from 63 percent but was far greater than 45 percent this week in 2011. The proportion of refinance borrowers who took cashout was 13 percent, leaving rate-term share at 51 percent.
ARM share slipped to 9.8 percent this week from last week’s 9.9 percent and was 10.8 a year previous.
The one bright spot this week was jumbo activity, which increased 6 percent from a week ago. The improvement came as jumbo pricing became more competitive with conforming pricing. Jumbo loans were priced at a 53-basis-point premium over conforming loans, better than 55 BPSÂ a week earlier and 60 BPS a year earlier.
Fifteen-year mortgages were also more competitively priced, with the discount for a 15-year loan versus a 30-year mortgage improving to 78 BPS from 77 BPS last week and 79 BPS the same week last year.
The conforming 30-year fixed-rate mortgage averaged 4.038 percent in the latest report, lower than 4.055 percent in the prior report and 4.94 percent a year prior.
The 30-year is poised to drift 3 BPS lower by the next Mortgage Market Index report. The yield on the 10-year Treasury note averaged 1.99 percent during the days that the index was tracked, while the 10-year yield closed this week at 1.96 percent, according to data from the Department of the Treasury.
