New mortgage business moved lower in the holiday week, with adjustable-rate mortgages leading the drop. Jumbo activity, however, was stronger.
The U.S. Mortgage Market Index from OpenClose and Mortgage Daily for the week ended June 3 was down 8 percent from a week earlier.
Based on average per-user rate locks by customers of OpenClose, the index increased by 13 percent compared to the same week last year.
Year-earlier figures were revised to reflect statistics from the same data provider of the index, which is not adjusted for seasonal variations.
Out front of the week-over-week decline
were ARM rate locks — tumbling 38 percent from the week ended May 27. ARM activity was off 7 percent from the same week last year. ARM share was cut to 7.7 percent from 11.5 percent a week earlier and 9.3 percent a year earlier.
Rate locks for mortgages insured by the Federal Housing Administration retreated 11 percent from the previous week but leapt 31 percent from the same week in the previous year. FHA share narrowed to 23.9 percent from 24.8 percent but was wider than 20.6 percent in the year-earlier period.
A 10 percent week-over-week drop was recorded for purchase financing activity, though the category was up 12 percent from the week ended June 5, 2015.
After that were rate locks
for conventional mortgages, which declined 7 percent from the last report. Conventional business, however, rose 8 percent from the year-earlier report.
Rate locks for refinances slipped 3 percent from the prior week but were up 43 percent from the same week the prior year. Refinance share was thicker at 66.3 percent versus 63.1 percent a week previous and 52.5 percent a year ago. This week’s share consisted of a 40.6 percent rate-term share and a 25.7 percent cashout share.
The only category that saw a week-over-week gain was jumbo mortgages, with rate locks rising a tenth. But jumbo business has fallen 14 percent from a year ago. Jumbo share widened to 7.9 percent from 6.6 percent but was cut from 10.4 percent a year prior.
Interest rates on jumbo mortgages were 9 basis points higher than conforming rates. The jumbo-conforming spread thinned from 11 BPS a week earlier and 15 BPS a year earlier.
Conforming 30-year fixed rates averaged 3.66 percent in the most-recent report, 2 BPS worse than the prior report but 61 BPS better than the year-prior report.
Rates on 15-year mortgages were 74 BPS less than 30-year rates. The spread was more narrow than 75 BPS seven days earlier and 89 BPS one year earlier.
Fixed mortgage rates are likely to be approximately 13 BPS lower in the next Mortgage Market Index report based on an analysis of Treasury market activity by Mortgage Daily. The large decline expected is the result of a weak employment report for May released today.
