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Mortgage Rates Settle Near Record Lows as Fiscal Cliff Talks Persist

Fixed mortgage rates showed little signs of life in the last full week of November, hovering near record lows as markets show heightened worry about the fiscal cliff.
[IMAGE] According to Freddie Mac's Primary Mortgage Market Survey, the 30-year fixed-rate mortgage (FRM) averaged 3.32 percent (0.8 point) for the week ending November 29, up from the previous week's record low of 3.31 percent.

The 15-year FRM also slid up, reaching 2.64 percent (0.6 point). The previous survey showed an average rate of 2.63 percent.

Meanwhile, the 5-year Treasury-index hybrid adjustable-rate mortgage (ARM) slipped down, averaging 2.72 percent (0.6 point) from 2.74 percent before. The 1-year ARM remained flat from week to week at 2.56 percent (0.5 point).

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Rates recorded for Bankrate's weekly survey were similarly unchanged. The 30-year fixed average fell from 3.53 percent to tie the survey's record low of 3.52 percent. The average 15-year fixed rate held steady at 2.86 percent.

The 5/1 ARM showed the most movement, bouncing up to 2.74 percent from 2.70 previously.

""The uncertainty of the fiscal cliff outcome has businesses, consumers, and financial markets uncertain and that uncertainty is good for mortgage rates,"" Bankrate said. ""Expect mortgage rates to remain at these levels as long as the fiscal cliff talks drag on.""

The majority of analysts surveyed by Bankrate-70 percent-expressed doubt that rates will post any notable movement one way or the other in the coming week. Of the remainder, 23 percent said they expect a drop, citing the little progress that's been made in avoiding the fiscal cliff.

Regardless of Washington's rhetoric, senior mortgage reporter Polyana da Costa says the power of the Federal Reserve's ongoing quantitative easing efforts is undeniable.

""With or without a deal to avoid the fiscal cliff, rates will stay where the Fed wants them,"" da Costa said.

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