Labor market responsible for slight uptick in mortgage rates
Posted on Thursday, July 10, 2014 at 10:06:08 AM
Overall, this year has been good to those interested in residential financing. Rates have been hovering near historical lows, and affordability has remained strong for months on end.
Recently, Freddie Mac reported that mortgage rates took a slight turn higher, thanks in part to an improved labor market. Even so, they are still low, with the 30-year fixed-rate mortgage coming in at 4.15 percent for the week ending July 10. The 15-year FRM averaged 3.24 percent, up from the previous week's 3.22 percent.
"Mortgage rates increased for the week as the labor market appears to be improving," explained Frank Nothaft, vice president and chief economist at Freddie Mac. "Based on the employment report released last week, the U.S. economy added 288,000 jobs in June, gained 224,000 in May and increased by 304,000 in April. Also, the unemployment rate in June fell to 6.1 percent from 6.3 percent in May."
In addition, interest in residential financing has climbed as well. According to the Mortgage Bankers Association, mortgage applications rose 1.9 percent on a weekly basis for the seven-day period ending July 4. The refinance share of all activity dropped slightly, now at 52 percent compared to 53 percent. Consumers turned to adjustable-rate mortgages 8 percent of the time, unchanged week-over-week.