Mortgage rates surge on jobs report

By Palm Beach Business.com

DELRAY BEACH — Last Friday’s strong jobs report from the Department of Labor sent mortgage rates fairly sharply higher.

Freddie Mac’s Primary Mortgage Market Survey spotted the average 30-year fixed-rate mortgage at 5.21 percent with an average 0.6 point, up from last week’s 5.08 percent. This is the highest the 30-year has been since August 13, when it averaged 5.29 percent.

Bankrate, meanwhile, pegged the 30-year at 5.35 percent, with 0.47 point, up from 5.23 percent a week ago.

Both Freddie Mac and Bankrate cited a burst of good news on the economy, including the March jobs report, issued April 2, as the catalyst for the upward swing in rates. Although the jobless rate held steady at 9.7 percent last month, the Labor Department reported the economy added 162,000 jobs — the most since 2006.

“Once again, mortgage rates followed bond yields higher amid a positive March employment report,” said Frank Nothaft, Freddie Mac vice president and chief economist.  “The economy added 162,000 jobs, which was the largest monthly gain over the past three years.  In addition, revisions raised the January and February figures by a combined 61,000 workers.  Excluding government employees, private payrolls rose for the third consecutive month and were the strongest increase since May 2007.”

While the yield on the benchmark 10-year Treasury bond soared 12 basis points late last week and early this week to 4.01 percent, it has since settled back down to 3.91 percent as of today.

Freddie Mac said the 15-year fixed rate mortgage averaged 4.52 percent with an average 0.6 point, up from last week’s 4.39 percent. This is the highest the 15-year has been since the week ending December 31, 2009, when it averaged 4.54 percent.

Bankrate put the 15-year at 4.69 percent, with 0.37 point, its high-water mark for the year so far.
Whether the week’s jump in rates is part of a trend or an aberration is unclear, at least to Bankrate’s panel of mortgage experts. Thirty-eight percent of the panelists polled see rates moving higher, while 31 percent see rates falling and 31 percent see rates pretty much holding steady over the near term.

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