The 30- and 15-year fixed mortgage rates eased back to within one basis point of their record lows to 3.88% and 3.12%, respectively, in the week ending April 26 said Freddie Mac.

Meanwhile, ARM rates were mixed with 5/1 hybrid rates jumping seven basis points to 2.85% as one-year rates fell a like amount to 2.74%.

Rates levels should keep the Mortgage Bankers Association's Refinance Index in its current area of 3700 which is closer to the lower end of its 3438-4538 range this year. For the week ending April 20, the Refi Index declined nearly 6% despite the historically attractive rate levels.

Morgan Stanley analysts suggested the decline in refinancing activity — despite easing in mortgage rates — may be partly explained by the lowering in rates being concentrated towards the end of the week. If so, this may provide some bounce in refinancing activity this week towards this year's average of 4000.

So far in April, refinancing activity is little changed on average from March's level. This would support the May prepayment outlook for speeds on production coupons holding little changed from the April estimate (impacted also by a decline in the number of collection days), while Home Affordable Refinance Program's influence has higher coupon speeds increasing 2%-4%.


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