Fixed related mortgage rates surged in the week ending December 9, according to Freddie Mac's weekly survey.
The 30-year fixed mortgage rate averaged 4.61% with an average 0.7 point, up from 4.46% last week. This is the fourth straight weekly increase since rates reached a record low of 4.17% in early November.
The no point rate has backed up further to nearly 4.80%, further shrinking the universe of eligible borrowers with an incentive to refinance. This is evident in the Mortgage Bankers Association's report on application activity which yesterday recorded further slowing of 1.4% to ~2932 in the Refi Index for the week ending December 3 - its lowest level since June 2010.
15-year rates also jumped 15 basis points to 3.96%, while 5/1 Hybrid ARMs increased to 3.60% from 3.49%. One-year ARM rates recorded only a two basis points increase to 3.27%, and are just four basis points above record lows recorded three weeks ago.
Most of the recent increases in mortgage rates and decline in refinancing activity are expected to particularly influence January prepayments (reported in February). Along with a lower day count, speeds have been previously expected to decline 10% following a modest increase in December due primarily to one additional collection day.