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Strong economic data leads to higher mortgage rates

Posted on Friday, March 13, 2015 at 7:58:58 AM

All in all, 2015 has been a good year for home affordability and low residential financing rates. Even as rates climb slightly, homebuyers will have plenty to look forward to in the market.

According to Freddie Mac, the 30-year fixed-rate mortgage averaged 3.86 percent for the week ending March 12. The 15-year FRM averaged 3.10 percent during that time, up from the previous reading of 3.03 percent. Both adjustable-rate variants also increased on a weekly basis.

These gains were attributable to an improved labor market and other positive economic conditions, explained Len Kiefer, deputy chief economist at Freddie Mac.

"The U.S. economy created 295,000 jobs in February, while the unemployment rate dipped to 5.5 percent from 5.7 percent in January, both outperforming market expectations," Kiefer noted.

In addition, the Mortgage Bankers Association reported that residential financing applications declined 1.3 percent for the week ending March 6, a sign of less consumer demand early in the month. The refinance share of mortgage activity dropped as well, now at 60 percent compared to 62 percent.

Even with the declines, residential financing - and the housing market - remain affordable for many potential buyers.