Mortgage rates recorded modest increases in the week ending March 15, according to Freddie Mac's survey.More specifically, 30-year fixed mortgage rates averaged 3.92% compared to 3.88% last week. Meanwhile, 15-year fixed moved up to 3.16% from 3.13%; 5/1 hybrid ARMs rose two basis points to 2.83%, while one-year ARMs "jumped" six basis points to 2.79%.Mortgage rates are likely to have moved up higher as the survey is done earlier in the week.

Still, Deutsche Bank Securities analysts suggested that rates to borrowers should move up more slowly as originators try to keep rates lower to keep the pipeline full. They said the last few weeks have started to show this trend which helps limit the extension risk in MBS.

Refinancing activity has been a bit sluggish since mortgage rates moved from their record low 3.87% held over the first three weeks of February.

Since a year-to-date peak of 4538 for the week ending Feb. 10, the Mortgage Bankers Association's (MBA) Refinance Index has declined 12.5% to 3972 through the week ending March 9.

Further declines are expected in next week's survey, although  Home Affordable Refinance Program (HARP) activity could start to show further gains as the GSEs have the HARP 2.0 changes up on their platforms now.

Increased HARP volume was noted in yesterday's MBA report. According to Michael Fratantoni, vice president of research and economics, "HARP volume continued to grow as a share of total refinance volume, reaching roughly 30% of refinance activity in the last two weeks. Typical HARP loans had loan-to-value ratios above 90%, indicating that lenders are reaching out to underwater borrowers."

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