Job gains fuel rise in mortgage rates
By Martin Crutsinger
WASHINGTON Mortgage rates rose again this week with 30-year mortgages hitting their highest level in four months and one-year adjustable rate mortgages rising to the highest level in more than three years.
In its weekly survey, mortgage giant Freddie Mac reported yesterday that rates on 30-year, fixed-rate mortgages rose to a nationwide average of 5.89 percent, up from 5.82 percent last week.
It marked the sixth week in a row that rates on 30-year mortgages have risen, pushing them to the highest level since they averaged 5.91 percent for the week ending April 14.
For one-year adjustable rate mortgages, rates rose to 4.57 percent, up from 4.47 percent last week. That was the highest level for one-year ARMS in more than three years, since they averaged 4.66 percent in mid-July 2002.
Analysts attributed the latest increase to a strong jobs report last Friday that showed the economy created 207,000 jobs in July.
"The stronger-than-expected employment report, coupled with upward revisions in job growth for the previous two months, renewed the market's fear of inflation," said Frank Nothaft, chief economist for Freddie Mac.
Rates on 15-year, fixed-rate mortgages averaged 5.47 percent this week, compared with 5.38 percent last week. This week's rate was the highest since the first week in April.
Rates on five-year hybrid adjustable rate mortgages averaged 5.4 percent this week, up from 5.3 percent last week.
The averages for mortgage rates do not include add-on fees known as points. Fifteen-year and five-year mortgages each carried an average fee of 0.6 point this week. Thirty-year mortgages carried an average fee of 0.5 point while one-year ARMS had a fee of 0.7 point.
A year ago, 30-year mortgages averaged 5.85 percent, 15-year mortgages were at 5.24 percent and one-year ARMs averaged 4.08 percent. Freddie Mac does not have historical data on the five-year ARM, which it began tracking this year.
Associated Press