Slow Job Growth Pushes Rates Down

A further indication that the unemployment rate directly correlates with the recovery of the housing market:
Fixed-rate mortgages fell to new lows again this week after a weaker-than-expected job growth in May.
“Long-term Treasury yields moved lower following a weak jobs report and mortgage rates followed suit,” said Frank Nothaft, vice president and chief economist for Freddie Mac. “The economy added 54,000 jobs in May, the fewest in eight months, and factories cut payrolls for the first time in seven months. As a result, the unemployment rate rose to 9.1 percent, representing the highest rate since December.”
Here is the mortgage-rate breakdown for the week ending June 9:
*30-year fixed-rate mortgage (FRM): Averaged 4.49 percent, down from last week when it averaged 4.55 percent. Last year at this time, the 30-year FRM averaged 4.72 percent.
*15-year FRM: Averaged 3.68 percent, down from last week when it averaged 3.74 percent. A year ago at this time, the 15-year FRM averaged 4.17 percent.
*5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM): Averaged 3.28 percent this week, down from last week when it averaged 3.41 percent. A year ago, the 5-year ARM averaged 3.92 percent.
*1-year Treasury-indexed ARM: Averaged 2.95 percent this week, down from last week when it averaged 3.13 percent. At this time last year, the 1-year ARM averaged 3.91 percent.
“The housing market continues to be fragile across the nation as well,” said Nothaft. “In its latest regional economic review released June 8th, the Federal Reserve Board indicated that residential sales and home prices showed continued weakness in most Districts.”
In other words, it’s still a buyer’s market out there.