Lower Unemployment Means (Slightly) Higher Mortgage Rates

Freddie Mac released its weekly update on national mortgage rates on Thursday morning, showing mortgage rates beginning to inch back up again after nearly a month of flat to declining rates: 30-year fixed-rate mortgages (FRMs) ticked up three basis points to 4.15%; 15-year FRMs gained two basis points, rising to 3.24%. One year ago, 30-year FRMs cost 4.51% and 15-years 3.53%.

Meanwhile, 5/1 adjustable-rate mortgages (ARMs) added a single basis point in the most recent week, rising to 2.99%, and 1-year ARMs added two basis points to land at 2.42%. A year ago, 5/1 ARMs were at 3.26% and 1-year ARMs at 2.66%.

Freddie Mac's vice president and chief economist, Frank Nothaft, pointed to improvements in the labor market as likely being behind the slight rise in rates, with last week's employment report showing "the U.S. economy added 288,000 jobs in June, gained 224,000 in May and increased by 304,000 in April." He also noted that the unemployment rate in June fell to 6.1% from 6.3% in May.

Lower unemployment is good news for homebuyers, home sellers, and mortgage lenders, as it tends to produce more paychecks that can be used to pay higher mortgage rates. 

You can't afford to miss this
"Made in China" -- an all too familiar phrase. But not for much longer: There's a radical new technology out there, one that's already being employed by the U.S. Air Force, BMW and even Nike. Respected publications like The Economist have compared this disruptive invention to the steam engine and the printing press; Business Insider calls it "the next trillion dollar industry." Watch The Motley Fool's shocking video presentation to learn about the next great wave of technological innovation, one that will bring an end to "Made In China" for good. 

The article Lower Unemployment Means (Slightly) Higher Mortgage Rates originally appeared on Fool.com.

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