Mortgage rates climbed to four-month highs this week on news that payrolls increased by more than 300,000 jobs in March, according to surveys conducted by mortgage buyer Freddie Mac and Bankrate.
In Freddie Mac’s weekly survey, the 30-year fixed-rate mortgage averaged 5.79 percent for the week ended today, up significantly from last week when it averaged 5.52 percent.
The average for the 15-year fixed-rate mortgage this week is 5.12 percent, up as from last week when it averaged 4.84 percent. Points on both the 30- and 15-year averaged 0.7.
One-year Treasury-indexed adjustable-rate mortgages averaged 3.65 percent this week, with an average 0.5 point, up from 3.46 percent last week.
“The bond market reacted to the welcome news last Friday that jobs are finally being created, which is much needed for continued expansion of the economy,” said Amy Crews Cutts, Freddie Mac’s deputy chief economist.
“Mortgage rates again followed the bond market, rising significantly from last week to this week, and spurring speculation that the Federal Reserve Board will raise rates sooner rather than later.
“With that said, it should also be noted that long-term rates are not expected to rise precipitously and, in fact, we still expect the 30-year fixed-rate mortgage will average below 6 percent for 2004.”
Mortgage rates jumped sharply for the third consecutive week, according to Bankrate.com’s weekly national survey of large lenders. The average 30-year fixed-rate mortgage increased from 5.6 percent to 5.8 percent in Bankrate’s survey. The mortgages in this week’s survey had an average of 0.37 discount and origination points.
The 15-year fixed-rate mortgage popular for refinancing climbed by one-quarter percent, from 4.89 percent to 5.14 percent. The jumbo 30-year fixed-rate mortgage surged 21 basis points to 6 percent, and the one-year adjustable-rate mortgage increased by a more modest 12 basis points to 3.66 percent. A basis point is one one-hundredth of one percentage point.
The catalyst for this week’s move in mortgage rates was the release of the March employment report, showing nonfarm payrolls grew by an estimated 308,000 jobs. One month ago when a disappointing report for February was issued, the average 30-year fixed-rate mortgage fell 20 basis points, from 5.64 percent to 5.44 percent. This month, mortgage rates responded in a similar fashion – albeit in the opposite direction. The average mortgage rate climbed from 5.6 percent to 5.8 percent as bond investors unloaded long-term government bonds. Mortgage rates are closely related to yields on long-term government bonds.
The following is a sampling of Bankrate’s average 30-year-mortgage interest rates this week in some U.S. metropolitan areas.
New York – 5.84 percent with 0.06 point
Los Angeles – 5.77 percent with 0.65 point
Chicago – 5.9 percent with 0.08 point
San Francisco – 5.85 percent with 0.44 point
Philadelphia – 5.77 percent with 0.24 point
Detroit – 5.72 percent with 0.44 point
Boston – 5.9 percent with 0.01 point
Houston – 5.79 percent with 0.59 point
Dallas – 5.78 percent with 0.62 point
Washington, D.C. – 5.74 percent with 0.56 point
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