Mortgage rates held near their historic lows in the week ending Nov. 29.

Freddie Mac's weekly primary mortgage market survey reported both 30- and 15-year fixed mortgage rates averaged one basis point higher to 3.32% and 2.64%, respectively. Meanwhile on the adjustable side, one-year ARM rates were unchanged at 2.56% and 5/1 hybrid ARMs two basis points lower to 2.72%.

For the month of November, 30-year mortgage rates averaged 3.34% compared to 3.38% in October. Refinancing activity has been about 5% slower on average over the first three weeks of November compared to the previous month's average; however, activity is expected to hold near current levels or increase for various reasons.

For example, increased prepayment risk is the forecast for 2013 with impact from several sources including ongoing tweaks to HARP and Federal Housing Administration programs to help credit-impaired borrowers, new policies, improving home prices, increased originator capacity and historic mortgage rate levels.

Particularly in regards to the last two points, the Fed's ongoing presence in the mortgage market should make mortgage bankers comfortable in adding capacity. This should also contribute to further reductions in mortgage rates through a tightening between primary and secondary spreads. Between the Fed's support and a narrowing difference between primary and secondary mortgage rates, Bank of America Merrill Lynch said they expect mortgage rates will head lower.

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