Mortgage rates climbed this week following Friday’s Department of Labor announcement that the economy created significantly more jobs in December than expected, Freddie Mac said today.
The 30-year fixed-rate mortgage rose to an average 6.21 percent this week from 6.18 percent last week, according to Freddie Mac’s weekly survey, while the 15-year fixed-rate mortgage gained from 5.94 percent to 5.96 percent. Points, which are fees lenders charge for loan processing expressed as a percent of the loan, averaged 0.4 on these loans.
“The December employment report came in higher than expected, providing a lift to interest rates,” said Frank Nothaft, Freddie Mac vice president and chief economist, in a statement. “The gain in employment in December exceeded the consensus forecast, and helped ease fears about the state of the economy. But stronger employment and higher wages put upward pressure on inflation, which, in turn, translates into higher interest rates.”
The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) inched up to an average 6.03 percent this week, with an average 0.5 point, while the one-year Treasury-indexed ARM rose to an average 5.44 percent, with an average 0.5 point.
Looking toward the future, Nothaft said mortgage rates on 30-year loans will likely stay below 6.5 percent this year, which should steer borrowers away from riskier adjustable-rate loans and reduce the ARM share of purchase loans to “below 20 percent for the first time since 2003.”
The following is a sampling of Bankrate.com’s average 30-year-mortgage interest rates this week in some U.S. metropolitan areas:
New York – 6.21 percent with no points
Los Angeles – 6.31 percent with 0.35 point
Chicago – 6.4 percent with no points
San Francisco – 6.21 percent with 0.35 point
Philadelphia – 6.19 percent with 0.25 point
Detroit – 6.28 percent with no points
Boston – 6.28 percent with 0.06 point
Houston – 6.22 percent with 0.42 point
Dallas – 6.2 percent with 0.37 point
Washington, D.C. – 6.13 percent with 0.48 point