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Freddie Mac: Poor jobs report sinks mortgage rates

By Palm Beach Business.com

DELRAY BEACH — Mortgage rates reversed course over the past week and dropped sharply, largely because of the disappointing jobs report from the Labor Department.

Freddie Mac’s Primary Mortgage Market Survey, released Thursday, found the average 30-year fixed-rate mortgage dropping to 4.51 percent with 0.7 point from 4.60 percent a week earlier. Bankrate’s national mortgage survey found the 30-year averaging 4.69 percent with 0.36 point, down from 4.79 percent a week earlier.

Palm Beach Business.com’s South Florida Survey found the 30-year averaging 4.51 percent with 0.86 point.

Both the Bankrate and Freddie Mac surveys had found rates rising sharply a week earlier, but on Friday the Labor Department reported the economy created few jobs in June, while the jobless rate moved. That pushed the stock market down as investors moved to the relative safety of Treasury bonds.

"Long-term bond yields and mortgage rates fell this week following a weak employment report,” Freddie Mac’s Frank Nothaft said. “The economy added 18,000 jobs in June, well below the market consensus forecast, and the unemployment rate rose to 9.2 percent, the highest since December 2010. In addition, employee wages stagnated. These factors may lead to less consumer spending, which in turn, reduces the threat of inflation in the near term."

Bankrate said that some mortgage experts see the downward movement in rates lasting at least another week.

Also from the surveys: the 15-year fixed-rate mortgage dropped to 3.65 percent with 0.6 point from an average of 3.75 percent a week earlier, according to Freddie Mac. Bankrate’s survey had the 15-year averaging 3.82 percent with 0.36 point, down from 3.90 percent a week earlier.