Long-term mortgage interest rates jumped up in the latest week, as investors responded to news that American job creation outpaced predictions in February.
The average rate on a 30-year fixed-rate conventional mortgage bounced up to 3.86 percent, excluding fees, during the week ended March 12, according to Freddie Mac, up from 3.75 percent the week before . That is the highest level year-to-date although still historically low. The 30-year loan rate has not averaged above 4 percent since November 2014. Last year at this time, the average was 4.37 percent.
“The average 30-year fixed-rate mortgage rose to 3.86 percent for this week following a strong labor market report, essentially bring rates back to where they were at the start of the year,” said Freddie Mac deputy chief economist Len Kiefer. He reported that “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.”
Erin Lantz, vice president of mortgages at Zillow confirmed Kiefer’s analysis. Rates remained flat for most of last week but jumped sharply after Friday’s exceptionally strong jobs report, before easing back down early this week,” said Erin Lantz, vice president of mortgages at Zillow. She did not think rates would continue to spike in the coming days though. “We expect rates to hold steady this week due to little incoming data and the official start of the European Central Bank’s bond purchases.”
Other rates rose as well in the past week. The 15-year fixed rate mortgage carried an average rate of 3.10 percent, up from 3.03 percent the previous week and the one-year adjustable rate mortgage averaged 2.46 percent, an increase from 2.44 percent a week earlier.