For the week ending Dec. 1, mortgage rates were little changed as reported by Freddie Mac's weekly survey.

The 30-year fixed mortgage rates averaged 4.0%, up two basis points from last week, while 15-year fixed rates were unchanged at 3.30%. Meanwhile, 5/1 hybrid ARMs and one-year ARMs set new record lows of 2.90% and 2.78%, respectively, down one basis point for both over the week.

Since dropping from 4.10% to 4.0% in the week ending Nov. 3, 30-year rates have ranged between 3.98% and 4.0%. Meanwhile, the Refinance Index has dropped from 3967.5 to 2834.5 for the week ending Nov. 25, or nearly 29%.

In a recent emailed comment, Scott Buchta, a managing director at Sandler O'Neill, suggested falling home prices, as well as, tight credit conditions are having an impact on post-Home Affordable Refinance Program (HARP) borrowers' ability to refinance.

He noted that originators have started reducing their rates to entice more high-quality borrowers into refinancing. Primary/secondary spreads will continue to fall if 10-year note yields remain in the 2.0% area, Buchta said.

Buchta added that if refi volumes continue to decline, it may force originators to start soliciting HARP 2.0 loans sooner than expected.

For the month of November, 30-year fixed mortgage rates averaged 3.99% compared to 4.07% in October. Meanwhile, through Nov. 25 the Mortgage Bankers Association's (MBA) Refinance Index has averaged nearly 6% lower month to month despite improved mortgage rate levels.

The influence of this should begin to show in the December and more fully in the January prepayment reports. At this time, speeds are projected to be more or less flat from November's predicted increase of less than 5%.

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