A deceleration in new mortgage refinance activity more than offset a week-over-week increase in purchase financing. New jumbo business, however, moved solidly higher.
The U.S Mortgage Market Index from Mortgage Daily and OpenClose for the week ended Dec. 16, an indicator of upcoming residential loan originations,
landed at 154.
That left the index, a reflection of average per-user rate locks by OpenClose clients, at 2 percent less than the previous week. No seasonal adjustments are made to the MMI.
Compared to the same week last year, the index was mostly unchanged.
Rate locks for refinances tumbled 15 percent from the week ended Dec. 9, though they were still up 3 percent from the downwardly revised level one year prior. Refinance share was cut to 38.1 percent from 43.9 percent
but was still wider than 36.9 percent 12 months earlier. This week’s share was comprised of a 21.6 percent rate-term share and a 16.5 percent cashout share.
Rate locks for government mortgages fell 11 percent from the prior report, leaving the Government MMI at 55. Government share thinned to 36.0 percent from 39.5 percent. This week’s share consisted of a 27.0 percent FHA share and a 9.0 percent VA share.
Adjustable-rate mortgage business slowed by 5 percent from a week earlier and was down 20 percent from a year earlier. ARM share narrowed to 7.8 percent 8.1 percent and was also reduced from 9.7 percent in the week ended Dec. 17, 2015.
Conventional mortgage business rose 4 percent for the week, leaving the Conventional MMI at 98.
Rate locks for purchase financing ascended 8 percent from the last report, with the Purchase MMI coming in at 95. Purchase business, however, slipped 2 percent from the upwardly revised level a year ago.
The best-performing category this week was the Jumbo MMI, which shot up 52 percent from a week prior.
Vincent E. Furey III, senior vice president at OpenClose, noted in a written statement that a “fair amount of jumbo locks were ARMs which are tied to short- and mid-term indices, so it makes sense that lock activity, as a share of overall activity, increased given the subsequent effect of Fed rate hike on short and mid-term indexes.”
But jumbo rate locks declined 16 percent from this week in 2015. Jumbo share widened to 7.3 percent from 4.7 percent but was trimmed from 8.7 percent one year previous. Rates on jumbo mortgages were 7 basis points more than conforming rates, swinging from a negative 7-basis-point spread in the last report and a negative 19 BPS in the year-earlier report.
