Mortgage rates edge up amid jobs growth
By Martin Crutsinger
Associated Press
WASHINGTON — Rates on 30-year mortgages edged up slightly this week following a better-than-expected report on job growth.
Mortgage company Freddie Mac reported yesterday that 30-year, fixed-rate mortgages averaged 6.40 percent this week, up from 6.37 percent last week.
In mid-September, the nationwide average for 30-year mortgages had dipped to 6.31 percent, the lowest level since May 17.
Analysts attributed this week's rise to a better-than-expected jobs reports showing that the economy created a solid 110,000 jobs in September and, even more significantly, that a supposed drop of 4,000 jobs in August was revised away. New data showed the economy actually created a respectable 89,000 jobs in August.
Frank Nothaft, chief economist at Freddie Mac, said the slight rise in rates this week also reflected a feeling in bond markets that future rate cuts by the Federal Reserve are less certain. Nothaft said investors now see about a 30 percent chance of a quarter-point rate cut at the Fed's next meeting on Oct. 30-31, down from a 50 percent likelihood before the release of the minutes of the Fed's September meeting, at which the central bank cut rates for the first time in four years.
Rates on 15-year fixed-rate mortgages, a popular choice for refinancing, averaged 6.06 percent this week, up from 6.03 percent last week.
Rates on five-year adjustable rate mortgages averaged 6.12 percent, up from 6.11 percent last week. One-year ARMs averaged 5.73 percent, up from 5.58 percent.
The mortgage rates do not include add-on fees known as points. Thirty-year mortgages carried a nationwide average fee of 0.4 point; 15-year and five-year mortgages both carried an average fee of 0.5 point. One-year adjustable-rate mortgages had an average fee of 0.6 point.
A year ago, 30-year mortgages stood at 6.37 percent, 15-year mortgages were at 6.06 percent, five-year ARMS averaged 6.10 percent and one-year ARMs were at 5.56 percent.