After nearly doubling last week, the number of borrowers inquiring about a refinance this week was up more than 40 percent. Spectacularly low mortgage rates were behind the burst in refinance activity.
Overall new mortgage activity climbed 31 percent, with the U.S. Mortgage Market Index from Mortech Inc. and Mortgage Daily for the week ended Aug. 12 rising to 470 from last week’s 358. The index, which reflects pricing inquiries by loan originators, was also higher than 325 during the same week last year.
The Mortgage Market Index has not been this high since launching in December 2009.
With a 42 percent gain from last week, the Refinance MMI was 326 in today’s report. Refinance share increased to 69 percent from last week’s 64 percent share. The share was also stronger than 62 percent during this week in 2010.
The latest reading reflected a 56 percent rate-term share and a 13 percent cashout share.
Even purchase activity benefited from the strong market, rising 12 percent from the prior week.
But the market for adjustable-rate mortgages fell to a share of 6.33 percent from 8.66 percent last week.
Plunging mortgage rates were behind the stellar performance. The conforming 30-year fixed-rate mortgage fell to 4.27 percent as of this week from 4.44 percent in last week’s report. The 30 year was 4.36 percent at this point last year.
The Treasury market rallied today, sending the yield on the 10-year Treasury 10 basis points lower than Thursday’s close to 1.56 percent, according to Treasury Department data. The movement suggests that next week’s Mortgage Market Index report could reflect an even lower 30-year mortgage rate.
Jumbo mortgages lost some of their allure this week, with the spread between the jumbo 30-year mortgage and the conforming 30 year widening to 53 BPS from 47 BPS in the prior report.
Also becoming less attractive versus the conforming 30 year was the 15-year mortgage, with the spread falling to 75 BPSÂ from 82 BPS.
