Editor’s note: This story has been revised to note that rates on one-year Treasury-indexed adjustable-rate mortgages hit a new low during the week ending Aug. 9.
Mortgage rates have moved higher off of record lows for the second consecutive week amid signs that the U.S. job market is stabilizing, according to a weekly survey by Freddie Mac.
For 30-year fixed-rate mortgages, rates averaged 3.59 percent with an average 0.6 point for the week ending Aug. 9, up from 3.55 percent last week but down from 4.32 percent a year ago, according to Freddie Mac’s Primary Mortgage Market Survey. Rates on 30-year fixed-rate mortgages hit an all-time low in Freddie Mac records dating to 1971 when they fell to 3.49 percent during the week ending July 26.
Rates on 15-year fixed-rate mortgages averaged 2.84 percent with an average 0.6 point, up from 2.83 percent last week but down from 3.5 percent a year ago. Rates on 15-year fixed-rate mortgages hit a low in records dating to 1991 of 2.8 percent during the week ending July 26.
For five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) loans, rates averaged 2.77 percent with an average 0.6 point, up from 2.75 percent last week but down from 3.13 percent a year ago. Rates on five-year ARM loans hit a low in records dating to 2005 of 2.74 percent during the week ending July 26.
Rates on one-year Treasury-indexed ARMs averaged 2.65 percent with an average 0.4 point, down from 2.7 percent last week and 2.89 percent a year ago. That’s a new low in records dating to 1984.
A separate survey by the Mortgage Bankers Association showed demand for purchase loans during the week ending Aug. 9 was down a seasonally adjusted 2 percent from the week before, and off 12 percent from the same time a year ago. Applications to refinance accounted for 81 percent of all mortgage loan applications.
The U.S. Bureau of Labor Statistics reported Friday that total nonfarm payroll employment rose by 163,000 in July, the biggest gain in five months. Job growth had been below the 100,000 mark for three months in a row. Nevertheless, 12.8 million Americans were still looking for work, and the unemployment rate was essentially unchanged at 8.3 percent.
The Department of Labor reported today that initial claims for unemployment benefits fell by 6,000 during the week ending Aug. 4, to a seasonally adjusted 361,000, suggesting that the increased job growth seen in July could be sustained into August, Reuters reported.
Positive economic news tends to send long-term interest rates up. Conservative investments like Treasurys and mortgage-backed securities that fund most U.S. mortgage loans may fall out of favor with investors when stocks seem to promise better returns.