Strong job growth fueled the sixth consecutive week of rising mortgage rates, according to surveys conducted by Freddie Mac and Bankrate.com.

In Freddie Mac’s survey, the 30-year fixed-rate mortgage averaged 5.89 percent for the week ended today, up from last week when it averaged 5.82 percent. The average for the 15-year fixed-rate mortgage this week is 5.47 percent, up from last week when it averaged 5.38 percent. Points averaged 0.5 on the 30-year loan and 0.6 on the 15-year.

The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 5.4 percent this week, with an average 0.6 point, up slightly from last week when it averaged 5.3 percent. The one-year Treasury-indexed ARM averaged 4.57 percent this week, with an average 0.7 point, up from last week when it averaged 4.47 percent.

“The stronger-than-expected employment report coupled with upward revisions in job growth for the previous two months renewed the market’s fear of inflation,” said Frank Nothaft, vice president and chief economist at Freddie Mac. “That’s because strong job growth can put upward pressure on wages – a key factor in inflation – that in turn, can drive long-term rates higher.

“As mortgage rates drift upward, we expect to see some moderation in housing activity. With that said, though, we still expect that 2005 will undoubtedly be a record year for sales and new construction.”

In Bankrate.com’s weekly survey, fixed mortgage rates increased for the sixth consecutive week, and remain at a four-month high. The average 30-year fixed-rate mortgage climbed from 5.91 percent to 5.96 percent, Bankrate.com reported. The 30-year fixed-rate mortgages in this week’s survey had an average of 0.38 discount and origination points.

The average 15-year fixed mortgage rate increased by the same amount, from 5.51 percent to 5.56 percent, while the average jumbo 30-year fixed-rate mortgage rose from 6.1 percent to 6.14 percent. Adjustable-rate mortgages were up at a more pronounced pace this week, with the average 5/1 adjustable-rate mortgage nudging higher from 5.51 percent to 5.62 percent, and the one-year ARM rising to 4.89 percent from 4.82 percent one week ago. The average one-year adjustable rate is the highest since June 2002.

A report of strong job growth, including upward revisions to prior months’ results, helped push mortgage rates higher. Evidence of an improving job market validated other positive economic news in recent weeks, such as economic expansion and strength in the manufacturing sector. In response to this accumulation of upbeat economic news, yields on 10-year Treasury notes have continued to climb. Fixed 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 – 5.97 percent with 0.21 point

Los Angeles – 6 percent with 0.56 point

Chicago – 6.08 percent with 0.01 point

San Francisco – 6.01 percent with 0.33 point

Philadelphia – 5.87 percent with 0.37 point

Detroit – 5.95 percent with 0.25 point

Boston – 6.02 percent with 0.11 point

Houston – 5.87 percent with 0.76 point

Dallas – 5.94 percent with 0.57 point

Washington, D.C. – 5.89 percent with 0.63 point

***

What’s your opinion? Send your Letter to the Editor to opinion@inman.com.

Show Comments Hide Comments

Comments

Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
Success!
Thank you for subscribing to Morning Headlines.
Back to top
Connect Now is TODAY! Join top producers as we discuss how to position your business for success in 2021.Click here to register×