Increasing rates on home loans drove down weekly refinance activity, helping to suppress overall mortgage activity ahead of the holiday week.
An 11 percent drop from the previous week left the U.S. Mortgage Market Index from OpenClose and Mortgage Daily at 128 for the week ended Sept. 4.
The index, which is not adjusted for seasonal variations, moves based on average per-user rate locks submitted by clients of OpenClose.
Compared to the same week last year, the MMI has retreated five percent. The year-earlier numbers were revised to reflect figures from the same data provider.
The biggest decline from the week ended Aug. 28, 2015, was with rate locks for adjustable-rate mortgages, which dropped 30 percent. ARM activity was off 10 percent from a year earlier. ARM share thinned to 10.8 percent from 13.6 percent in the last report and 11.3 percent in the year-prior report.
Refinance business slowed by 22 percent on a week-over-week basis but has ascended by nearly a quarter from the week ended Sept. 4, 2014. Refinances made up 62.1 percent of all rates locks during the most-recent report, down from 70.9 percent one week prior but more than 47.6 percent one year prior. Refinance share was made up of a 42.3 percent rate-term share and a 19.8 percent cashout share.
A more than 15 percent decline was recorded for jumbo activity, while the category was off less
than a percent from 12 months previous. Jumbo share slipped to 12.4 percent from 13.0 percent but was fatter than 11.9 percent in the year-earlier report.
Jumbo mortgage rates averaged 20 basis points less than their conforming counterparts. The jumbo-conforming spread thinned from a negative 28 BPS seven days prior but was wider than a negative 13 BPS a year ago.
Next up were rate locks for conventional mortgages, which were down less than 15 percent on a week-over-week basis and 13 percent on a year-over-year basis.
A 10 percent drop was recorded for purchase financing rate locks, while the category was down 14 percent from the same week in 2014.
The only category to improve from the last report was Federal Housing Administration loans, with the FHA MMI rising four percent for the week. Rate locks for FHA-insured mortgages were up 41 percent from 12 months ago — the best year-over-year performance. FHA share increased to 22.7 percent from 19.5 percent and was 15.3 percent this week last year.
Fixed rates on 30-year conforming mortgages averaged 3.89 percent, five BPS more than in the last report but 60 BPS less than in the year-earlier report.
Fifteen-year rates averaged 80 BPS less than 30-year rates. The spread widened from 78 BPS a week prior but was down from 97 BPS a year prior.
Fixed rates could be around seven BPS lower in the next report based on a Mortgage Daily analysis of Treasury market activity. Bond yields fell on a weak employment report.
