New mortgage activity was slammed by the Thanksgiving holiday. But two metrics that did increase were the jumbo-conforming spread and the government share of total activity.
Loan inquiries sank by one-third compared to last week, leaving the U.S. Mortgage Market Index from Mortech Inc. and MortgageDaily.com for the week ended Nov. 25 at only 161. Business slumped 36 percent from the same week last year, which also included Thanksgiving.
Leading the decline were refinances, which tumbled 35 percent during the past seven days. Refinances were down a quarter from the week ended Nov. 24, 2010.
Refinances accounted for 63 percent of loan inquiries, a smaller share than 65 percent a week earlier but more than the 54 percent share a year earlier. The latest figure reflected a 48 percent rate-term share and a 15 percent cashout share.
Purchase inquiries fell 31 percent and were down by nearly half from a year ago.
Inquiries for loans insured by the Federal Housing Administration were down less than any other category during the past seven days:Â 31 percent. FHA share rose to 11.41 percent from 10.81 percent last week — possibly impacted by the recent passage of legislation that keeps jumbo FHA limits in effect for another two years.
The conforming, 30-year, fixed-rate mortgage averaged 4.21 percent, 2 basis points lower than the prior report and 27 BPS better that a year ago.
Jumbo mortgages were priced 68 BPS more than conforming loans this week, deteriorating from 60 BPS in the report for the week ended Nov. 18. The conforming-jumbo spread was 84 BPS at this point in 2010.
Borrowers inquiring about a 15-year mortgage were quoted rates that were 61 BPS lower than 30-year borrowers. The spread wasn’t as good at 65 BPS in the prior report and 66 BPS in the same week during the prior year.
At this point, an analysis of this week’s Treasury market activity suggests that mortgage rates could be 3 BPS higher by next Friday. The 10-year Treasury note yield closed at 1.97 percent today, versus an average of 1.94 percent for the entire week.
