Freddie Mac reported a slight easing in fixed-related mortgage rates in the week ending April 5. The 30-year rates averaged 3.98%, down one basis point from last week; 15-year rates slipped to 3.21% from 3.23%, while 5/1 hybrid ARMs were at 2.86% from 2.90%.

Meanwhile, one-year ARM rates were unchanged at 2.78%.

The refinance response is expected to remain fairly muted as a no-point rate at 4.16% does not provide enough of an incentive for many borrowers underlying 3.5% and 4.0% coupons.

While the Mortgage Bankers Association's Refinance Index did increase by 4.0% to 3576 in the week ending March 30 as mortgage rates dipped back below 4.0%, it remains well off its year-to-date high of 4538 in mid-February when 30-year mortgage rates were at a record low 3.87%.

It appears, however, that lenders may be getting more competitive which could stimulate activity, including that which is Home Affordable Refinance Program-related. In an MBSTrader comment yesterday, Deutsche Bank Securities pointed out that in the time since they began surveying lenders' rates (August 2011), the four large banks have recently become more aggressive in lowering their rates and that the spread between this group and the next six lenders has narrowed to 7 basis points from 20 basis points.

They also observed that refinancing rates appeared improved relative to purchase rates. For example, they said that last week refinancing rates for five of seven lenders were 1/8% or more higher than for purchases, but this week only two were higher, while one lender had a lower posted rate.

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