Increasing interest rates on residential loans negatively impacted new weekly mortgage business. But, as is typical in a rising-rate environment, demand for adjustable-rate mortgages strengthened.
The U.S. Mortgage Market Index from OpenClose and Mortgage Daily, an indication of upcoming originations, was 158 in the week ended Nov. 18, retreating 13 percent from the previous week.
The
index, which is based on average per-user rate locks by OpenClose clients, initially rose following the election as borrowers rushed to lock in interest rates before they surged to an even higher level.
Compared to a year previous, the index has increased by a fifth.
Out front of the week-over-week decline was the Jumbo MMI, which fell 37 percent to 10. Jumbo business has fallen 35 percent from the week ended Nov. 20, 2015. Jumbo share was cut to 6.0 percent from 8.3 percent a week earlier and 11.1 percent a year earlier.
Interest rates on jumbo mortgages were 7 basis points lower than conforming rates. The jumbo-conforming spread swung from a positive 6 BPS the prior week and thinned from 19 BPS a year prior.
A 21 percent reduction from the week ended Nov. 11, 2016, was recorded for refinance rate locks, though at 60, the Refinance MMI has still ascended 45 percent from the downwardly revised level same week last year.
Refinance share thinned to 38.2 percent from 41.9 percent a week earlier and 31.4 percent from the downwardly revised share a year earlier. This week’s share was made up of a 21.9 percent rate-term share and a 16.3 percent cashout share.
The Conventional MMI was off 14 percent from the last report to 102.
At 56, the Government MMI fell 13 percent. Government share was 35.3 percent, slightly wider than 35.2 percent the prior week. The latest share consisted of a 25.5 percent FHA share and a 9.8 percent VA share.
Rate locks for purchase financing were off 8 percent, putting the Purchase MMI at 98. Compared to the upwardly revised level 12 months ago, purchase business rose 8 percent.
The only index to experience an increase from the last report was the ARM MMI, which jumped 18 percent to 17. The improvement in ARM business is typical when mortgage rates rise as prospective borrowers attempt to secure lower rates. ARM activity inched up 3 percent versus a year previous.
ARM share fattened to 10.6 percent from 7.7 percent but was still thinner than 12.3 percent in the year-prior report.
