Buoyed, in part, by a hopeful outlook for employment, the 30-year fixed-rate mortgage (FRM) posted its highest reading in eight weeks, an average 3.40 percent with 0.7 point.
Freddie Mac’s weekly Primary Mortgage Market Survey said the Jan. 10 rate was up from 3.34 percent the previous week and 3.89 percent a year ago.
The all-time record low for the average 30-year FRM was 3.31 percent, set November 21, 2012.
Surpassing forecasts, the economy added 155,000 jobs in December and the 1.86 million jobs created in 2012, was largest annual gain since 2006, according to the U.S. Department of Labor.
The economy isn’t growing much, but it’s also not shrinking. The nation’s unemployment rate held steady in December at 7.8 percent, the lowest since December 2008.
In fact, the economy is fairing well enough so that some members of the Federal Reserve’s Open Market Committee (FOMC) have some misgivings about how long the Fed will continue to purchase mortgage-backed securities.
The purchases began back in September 2012 to help keep interest rates low and stimulate the economy. The plan since evolved with tentative plans to purchase the securities as far out as 2015. Now, those purchases could end as early as this year, according to the Dec. 13, 2012 FOMC meeting minutes.
Release of the minutes earlier this week sent the stock market into a selling tizzy and pressured interest rates to rise.
For the 5-year Treasury-indexed hybrid adjustable rate mortgage (ARM), the average interest rate was 2.67 percent, with an average 0.6 point, down from last week’s 2.71 percent average and down from the average 2.82 percent a year ago.
The 5-year ARM was the only Freddie Mac benchmark mortgage interest rate to fall this week.
For the week ending Jan. 10, Freddie Mac also reported the 1-year Treasury-indexed ARM averaged 2.60 percent, with an average 0.5 point, up from 2.57 percent last week, and down from 2.76 percent a year ago.