The number of applications to secure a purchase mortgage loan for an existing home in the U.S. inched up 0.1 percent over the past week in the absolute and 2 percent on a seasonally adjusted basis, according to application data from the Mortgage Bankers Association.
That being said, purchase mortgage activity was down 32 percent on a year-over-year basis, dropping 5 percentage points over the past week; the average loan size declined for the third week in a row; and the national home price index is poised to turn negative for the first time in over a decade next week, as we outlined last month and shouldn’t catch any plugged-in readers by surprise.
And speaking of trends that shouldn’t catch any plugged-in readers by surprise, the spread between jumbo and conforming loans just inverted, with the average rate for a jumbo loan 2 basis points higher than conforming last week versus 60 basis points cheaper at the end of last year.
UPDATE: While the number of applications to secure a purchase mortgage loan for an existing home in the U.S. dropped 8 percent over the past holiday week, loan volume ticked up 3 percent on a seasonally adjusted basis and was only 21 percent lower than at the same time last year.
At the same time, the national home price index turned negative for the first time in over a decade and the recently inverted spread between jumbo and conforming loan rates widened to 16 basis point, none of which should catch any plugged-in readers by surprise.