Jobs Report's Strength Could Be Behind Rising Mortgage Rates

Before you go, we thought you'd like these...
Before you go close icon

Freddie Mac released its weekly update on national mortgage rates on Thursday morning. After seeing most rates fall a week ago, we're seeing them bouncing right back, yo-yo-like, this morning.

Both 30-year fixed-rate mortgages (FRMs) and 15-year FRMs spiked during the past week, with 30-year FRMs rising nine basis points to return to the 4.37% level of two weeks ago. Fifteen-year FRMs came within a single basis point of their two-week-ago level, rising six b.p. to 3.38%.

Additionally, 5/1 adjustable-rate mortgage (ARM) rates reacted even more abruptly, returning to levels last seen near the end of January, as they rose six basis points, to 3.09%. In contrast, one-year ARMs resumed a month-long trend of declines, falling four b.p. to land at 2.48%.

Freddie Mac vice president and chief economist Frank Nothaft pointed to February's above-estimates employment report of 175,000 jobs created in the month as one factor pushing rates upwards. Indicating a healthier economy, the employment number suggests more homebuyers may have paychecks coming in, with which to pay higher mortgage rates. Employment numbers for the previous two months were also revised upwards, by 25,000 jobs total.

Meanwhile, the unemployment rate rose to 6.7%. While this might sound like a negative development, it could actually indicate that more job seekers are returning to the market, temporarily unable to find work, but perhaps soon to do so -- if the jobs numbers continue to climb.


The article Jobs Report's Strength Could Be Behind Rising Mortgage Rates originally appeared on

Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

People are Reading