An even better-than-expected jobs report out today means that the Federal Reserve is almost certain to raise short-term rates this month, meaning that consumers will continue to see rising mortgage rates and higher borrowing costs overall.
Mortgage rates are not directly tied to the federal funds rate, which is adjusted by the Fed’s policymakers. But home loan rates often move higher immediately after a rate hike. That’s because investors consider the Fed’s move as a sign that the economy is getting stronger.
According to the latest data from Freddie Mac, the 30-year fixed-rate average jumped to its highest level of the year, 4.21 percent. It was 4.1 percent a week ago and 3.68 percent a year ago.
The 15-year fixed-rate average climbed to 3.42 percent, compared to 3.32 percent a week ago and 2.96 percent a year ago.
“For the first time in weeks, the 30-year mortgage rate moved with treasury yields and jumped 11 basis points to 4.21 percent,” Sean Becketti, Freddie Mac chief economist, said in a statement. “The strength of Friday’s employment report and the outcome of next week’s FOMC meeting are likely to set the direction of next week’s survey rate.”
Bankrate.com’s weekly mortgage rate index that tracks borrowing trends reports that 90 percent of experts surveyed expect rates will climb even higher in the coming days.
Meanwhile, mortgage applications for both home purchases and refinanincg jump last week, according to the latest data from the Mortgage Bankers Association. The market composite index, which measures total loan application volume — increased 3.3 percent. The refinance portion of the index increased 5 percent to its highest level since December. The purchase component of the index was up 2 percent.
Here is Freddie Mac’s overview of mortgage rates for the week:
- 30-year fixed-rate mortgage (FRM) averaged 4.21 percent, with an average 0.5 point for the week ending March 9, 2017, up from last week when it averaged 4.10 percent. A year ago at this time, the 30-year FRM averaged 3.68 percent.
- 15-year FRM this week averaged 3.42 percent, with an average 0.5 point, up from last week when it averaged 3.32 percent. A year ago at this time, the 15-year FRM averaged 2.96 percent.
- 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.23 percent this week, with an average 0.4 point, up from last week when it averaged 3.14 percent. A year ago, the 5-year ARM averaged 2.92 percent.