Favorable jobs outlook pressures mortgage rates to rise

risingrates

If more people go to work, there will be more demand on the housing market. That’s good for both households in need of work, the housing market and the economy as a whole.

However, even projected demand on housing can mean higher interest rates for mortgages.

The average interest rate on the 30-year fixed-rate mortgage (FRM) was 3.59 percent for the week ending Aug. 9, with an average 0.6 point, up from last week’s 3.55 percent.

Last year at this time, the average 30-year FRM interest rate was 4.32 percent.

The average rate on the 15-year FRM was 2.84 percent, with an average 0.6 point, also up from last week, when it averaged 2.83 percent. A year ago at this time, the 15-year FRM was 3.50 percent.

A favorable job report helped boost rates.

“Fixed mortgage rates inched up again this week following stronger-than-expected employment reports. The economy added 163,000 jobs in July, well above the market consensus forecast of 100,000, and the largest increase since February,” said Frank Nothaft, vice president and chief economist of Freddie Mac.

“In addition, the number of announced corporate layoffs fell 45 percent in July compared to last July and was the third time this year that announced layoffs were less than the same month in 2011 according to The Challenger Report. This suggests further net gains in employment are likely in the near future,” Nothaft added.

The 5-year Treasury-indexed hybrid’s adjustable rate (ARM) was 2.77 percent this week, with an average 0.6 point. It was up from last week when it averaged 2.75 percent. The 5-year ARM averaged 3.13 percent a year ago.

Finally, for the week ending Aug. 9, Freddie Mac reported the 1-year Treasury-indexed ARM averaged 2.65 percent, with an average 0.4 point, down from last week’s 2.70 percent, and down from 2.89 percent a year ago.

About the author

DeadlineNews.Com's Interest Rate Writer Corbin Perkins is an intern from Leigh High School. Contact him at CorbinPerkins@DeadlineNews.Com.

Website by imagiNed Web Design