Mortgage rates were little changed from last week despite the volatility in the market this week.

According to Freddie Mac, the 30-year fixed mortgage rate averaged 4.50% compared to 4.49% previously, with an average 0.7 point.  This keeps the no point rate in the higher 4.60% area. Meanwhile, 15-year fixed and 5/1 hybrid ARM rates slipped one basis point to new year-to-date lows of 3.67% and 3.27%, respectively, while one-year ARM rates rose two basis points from its record low to 2.97%.


MBS analysts say mortgage rates need to decline closer to 4% in order to realize a significant jump in refinancing activity to the peak levels experienced in 2010. Yesterday, the Mortgage Bankers Association (MBA) reported the Refi Index jumped nearly 17% to 2884, well away from the 4000-5000 area seen in late summer/early fall.

Credit Suisse noted in recent research that the current moneyness of the index is 20bps lower than in 2010 as the WAC of the universe is lower from refinancings that previously took place.  They cited increases in fees for FHA borrowers as also weighing on the index. 

HARP refinancings were a factor as well in last year's elevated activity which leaves a lower number of eligible borrowers still able to participate. 

According to Barclays Capital, the percentage of FNMA loans eligible for HARP has dropped to 57% from 80% as of the beginning of 2010.  They added that the recent 3-month extension in the HARP program for FNMA borrowers really impacts 4.5% and lower coupons and they are not yet in-

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