Fixed Rates Surge on Strong Employment Report

07/11/2013BY: TORY BARRINGER

Mortgage rates continued to trend higher this week following last week’s release of the June employment report.

According to Freddie Mac’s Primary Mortgage Market Survey, the 30-year fixed-rate mortgage (FRM) averaged 4.51 percent (0.8 point) for the week ending July 11, up from 4.29 percent last week and almost a full percentage point higher than the same week last year (3.56 percent).

The 15-year FRM averaged 3.53 percent (0.8 point), up from 3.39 percent previously.

Certain adjustable rates saw increases, too. The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.26 percent (0.7 point) this week, up from 3.10 percent in the last survey. The 1-year ARM averaged 2.66 percent (0.5 point), unchanged from last week.

“June’s strong employment led to more market speculation that the Federal Reserve will reduce future bond purchases causing bond yields to rise and mortgage rates followed,” explained Frank Nothaft, VP and chief economist at Freddie Mac. “However, the minutes of the June 18th and 19th Federal Reserve’s monetary policy committee meeting, released July 10th, stated that many members indicated further improvement in the outlook for the labor market would be required before it would be appropriate to slow the pace of bond purchases.”

Meanwhile, Bankrate.com’s weekly national survey saw mortgage rates rising to their highest level in the last two years. The 30-year fixed averaged 4.66 percent this week, while the 15-year fixed averaged 3.75 percent. The 5/1 ARM climbed to 3.63 percent.

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