WASHINGTON – Strong employment rates led to mortgage rates falling by 30-year fixed-rate average the highest it has been for almost eight years.
According to the latest data released on Thursday by Freddie Mac, the fixed rate average jumped to 4.94 percent with an average 0.5 point. (Points are fees paid to a lender corresponding to 1 per cent of the loan amount.) It was 4.83 per cent a week ago and 3.90 per cent a year ago. The 30-year-old fast last was this high in February 2011.
The 15-year fixed-rate average climbed 4.33 percent with an average 0.5 point. It was 4.23 percent a week ago and 3.24 percent a year ago. The five-year adjustable interest rate rose to 4.1
"All-important read on the US labor market showed stronger than expected employment and wage growth, giving the Federal Reserve another data point that indicates that the US economy can withstand higher interest rates," said Aaron Terrazas, senior economist at Zillow. "The upward the driving force for rates will probably continue in the short term. "
The Federal Reserve is closing its meeting later today and is not expected to increase the reference rate. However, indications that the Fed will increase short-term interest rates for the fourth time this year when it meets next The central bank does not determine mortgage rates, but decisions affect them.
Bankrate.com, which sets out a weekly housing index's trend index, found that the experts investigated were almost evenly divided by how prices are heading. Half said they wanted continue to rise in the coming week. The other half expect them to remain relatively stable.
Greg McBride, Financial Analyst at Bank rate.com, predicts that prices will rise.
"No Fed rate increase this week, but clear indications that another will come in December will push Bond yields and mortgage rates are a bit higher," said McBride.
Michael Becker, head of Sierra Pacific Mortgage, said the prices would Keeping stable.
"With a lack of financial news or reports about moving markets, I expect bond yields and mortgage rates to remain flat in the coming week," Becker says.
With interest rate hikes, mortgage lending continued to decrease, according to the latest data from the Mortgage Bankers Association. The market index – a measure of the total loan application volume – fell 4 percent from a week earlier. The refinancing index fell 3 percent from last week, while the purchasing index fell 1 percent.
Mortgage refinancing refinancing amounted to 39.1 percent of all applications.
"The steady increase in mortgage rates continues to weigh on mortgage applications, as total volume fell last week to its lowest level since December 2014," said Bob Broeksmit, MBA president and CEO. "Although the purchase programs went down for the second straight week, mortgage loans throughout the country say that homebuyer demand is still strong. With the growth in price growth moderated, inventory improves and revenues rise, the basis for activity is picking up before the end of the year. "
The MBA also launched its credit credit availability index (MCAI) this week which showed credit availability increased in October. MCAI increased 2.5 percent to 186.7 last month. An increase indicates lending standards loosen while a downturn tightens .
"Credit expansion increased in October, mainly driven by an expansion of the supply of conventional credit, while government credit fell a little over the month," Joel Kan, an MBA economist, said in a statement. "Return of a trend from last month made lenders more conventional and make repayments available to potential borrowers. This increase in supply was likely due to an increasing number of first-time home buyers in the market … Jumbo credit availability also expanded last month, with the jumbo index rising again to its highest level since the survey began. "