Fixed-rate mortgages rose sharply this week, despite the Fed’s big plan to keep them historically low.
The 30-year fixed-rate mortgage (FRM) averaged 4.12 percent for the week ending October 13 after falling below 4 percent last week for the first time ever.
The 15-year FRM increased as well, averaging 3.37 percent this week after last week’s 3.26 percent, according to Freddie Mac.
“An employment report that was better than market expectations helped to lift long-term Treasury bond yields and mortgage rates as well. The economy added 103,000 workers in September, aided by the return of striking Verizon workers. In addition, revisions to July and August figures added a total of 99,000 jobs to payrolls,” said Frank Nothaft, vice president and chief economist for Freddie Mac.
“However, these job gains are still not large enough to bring down the current unemployment rate of 9.1 percent.”
And, last week’s historically low rates weren’t enough to spur mortgage activity. Mortgage applications for the week ending October 7 rose a mere 1.3 percent, which included applications for refinancing and purchasing, according to the Mortgage Bankers Association. It would have been nice to see that number much higher.
Back to this week’s rates: The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.06 percent this week, up from 2.96 last week.
The 1-year Treasury-indexed ARM was the only rate to fall, averaging 2.90 percent after last week’s 2.95 percent.