Despite mortgage rates holding below 5%, mortgage application activity slipped 2.1% for the week ending Feb. 12.

According to the Mortgage Bankers Association, the average contract interest rate for 30-year fixed-rate mortgages was unchanged at 4.94%. 

Meanwhile, the Refinance Index lost nearly all of the previous week's increase, falling 1.2% to ~2863, while the Purchase Index declined 4% to ~213. 

As a percent of total applications, refinancing share was 69.3%, down from 69.7% previously.  ARM share was also lower to 4.4% from 4.5%. 

While refinancing activity remains muted despite mortgage rate levels, prepayment speeds in March are expected to gain in part on a higher day count of 23 days versus 19 in February. 

Speeds on 30-year GNMAs in our sample are currently projected to increase 16% after a projected slowing of around 1% in February. 

For FNMAs, however, the dominant influence will be the beginning of their delinquency buyback program.  As a result, speeds are currently estimated to soar 78%. 

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