Refinances Surge

May 6, 2011 By MortgageDaily.com staff

Declining rates this week helped spark lots of new refinance activity, though a healthy increase was also recorded for purchase business. Meanwhile, the spread between jumbo mortgages and conforming loans tumbled. The U.S. Mortgage Market Index from Mortech Inc. and MortgageDaily.com for the week ended Friday rose to 227 from the previous week's 203. But the index still sits below its 239 level of a year ago. Driving the increase was a 15 percent jump in refinance inquiries. Refinance share rose to 47 percent from 45 percent. This week's share reflected a 34 percent rate-term share and a 13 percent cashout share. Purchase inquiries were also stronger -- up 9 percent from last week. Conventional lenders reaped the rewards of the latest boost in business, with the Conventional MMI climbing 13 percent. The FHA MMI was only 3 percent higher. The share of shoppers who opted for an adjustable-rate mortgage fell to 10.45 percent from last week's 10.79 percent. Still, overall ARM inquiries were up 10 percent. The average 30-year fixed-rate conforming mortgage was priced at 4.843 percent this week, falling from 4.940 percent last week and 5.065 percent 12 months earlier. Compared to the conforming 30-year mortgage, the jumbo 30-year was priced more attractively this week. The jumbo-conforming spread dropped to 53 BPS from last week's 60 BPS. The 15-year also gained in appeal, with the spread between the 15-year and 30-year mortgage inching up to 80 BPS from 79 BPS seven days prior.