Plunging mortgages rates drove refinance activity to the highest level in more than a year — leaving overall lending activity busier than it’s been in 10 months.
The U.S. Mortgage Market Index from OpenClose and Mortgage Daily for the week ended Feb. 12 climbed 12 percent from a week earlier to 180.
The index is a reflection of the average number of rate locks submitted per user by clients of
OpenClose from Friday, Feb. 5, through Thursday, Feb. 11.
Based on historical data, the index was last this high in the week ended April 17, 2015, when it stood at 189.
Compared to the same week last year, however, the index has fallen 10 percent. Year-earlier numbers have been revised to reflect statistics from the same data provider.
The biggest jump in week-over-week activity was with adjustable-rate mortgages, with the ARM MMI up by half to 15. ARM business was down, though, 11 percent from the week ended Feb. 13, 2015.
ARM share was 8.5 percent, wider than 6.3 percent a week earlier but thinner than 8.6 percent a year earlier.
Driving up overall activity was the Refinance MMI, which jumped 22 percent from the week ended Feb. 5, 2016, to 160. Refinance activity was even up from a year earlier, by 27 percent. The refinance index was last this high in the week ended Jan. 30, 2015.
In line with rising refinance volume, refinance share widened to 88.6 percent from 81.3 percent in the last report and 63.2 percent in the year-earlier report.
Rate-term share made up 57.7 percent of the latest share, and cashout share was 30.9 percent.
Conventional business was up 13 percent from the last report but down 14 percent from the same week last year.
Rate locks for mortgages insured by the Federal Housing Administration improved by 7 percent and were up by a 10th from this week in 2015. FHA share slipped to 23.7 percent from 24.8 percent but was still wider than 19.4 percent 12 months ago.
Purchase financing activity inched up 2 percent from seven days previous and dipped 4 percent from a year previous.
There was no week-over-week change in jumbo business. But the category plunged 32 percent from the same week in 2015. Jumbo share declined to 7.2 percent from 8.0 percent in the week-earlier report and 9.6 percent in the year-earlier report.
Interest rates on jumbo mortgages were 14 basis points less than on conforming loans, thinning from a negative 20 BPS. But the jumbo-conforming spread swung from a positive 21 BPS one year ago.
Thirty-year fixed rates averaged 3.65 percent, down seven BPS for the week and 42 BPS better than 12 months ago.
The spread between 15- and 30-year rates thinned to 70 BPS from 71 BPS and was way down from 83 BPS this week last year.
A Mortgage Daily analysis of Treasury market activity indicates that fixed mortgage rates aren’t likely to be much different in the next Mortgage Market Index report.
