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30-Yr Mortgage Rate Hits 10-Week High 4.46%
USINFO | 2013-12-10 17:21
With Treasury yields creeping higher lately, mortgage rates rose in the latest week as well, with the average 30-year fixed-rate mortgage rate jumping to 4.46% – the highest reading since the week ending Sept. 19 – from 4.29% a week earlier, according to Freddie Mac’s (FMCC) latestPrimary Mortgage Market Survey. A year ago that rate stood at 3.34%, just off its all-time low 3.31%. The average 15-year fixed-rate mortgage rate also rose to 3.47% from 3.30% a week earlier and 2.67% a year ago.
“Fixed mortgage rates increased this week following stronger than expected economic data releases,” said Frank Nothaft, Freddie Mac’s chief economist, in a statement, citing Wednesday’s above-expected ADP employment report reading and the 25% rise in October new home sales.
Those signs of economic growth, particularly in the labor market, are raising market expectations that the Federal Reserve will start winding down its $85 billion monthly purchases of Treasuries and mortgage bonds at its next two-day meeting that starts Dec. 17. As evidenced by its taper fake-out in September, the Fed has put itself in a bit of a bind: it wants the economy to show sustained strength before it tapers its bond purchases, but when the market starts thinking the Fed might do that, bond yields rise, as they have in recent days, and the Fed has said the economy might still lack the strength to withstand higher rates. All eyes this week are on the Labor Department’s nonfarm payroll report, which is due out Friday morning.
A similar 30-year mortgage rate measured by the Mortgage Bankers Association’s latestweekly survey ticked higher to 4.49% from 4.48% a week earlier, and has been stuck in a narrow band for several weeks now. That survey also showed mortgage applications fell by 12.8% in the holiday-shortened Thanksgiving week.
“Fixed mortgage rates increased this week following stronger than expected economic data releases,” said Frank Nothaft, Freddie Mac’s chief economist, in a statement, citing Wednesday’s above-expected ADP employment report reading and the 25% rise in October new home sales.
Those signs of economic growth, particularly in the labor market, are raising market expectations that the Federal Reserve will start winding down its $85 billion monthly purchases of Treasuries and mortgage bonds at its next two-day meeting that starts Dec. 17. As evidenced by its taper fake-out in September, the Fed has put itself in a bit of a bind: it wants the economy to show sustained strength before it tapers its bond purchases, but when the market starts thinking the Fed might do that, bond yields rise, as they have in recent days, and the Fed has said the economy might still lack the strength to withstand higher rates. All eyes this week are on the Labor Department’s nonfarm payroll report, which is due out Friday morning.
A similar 30-year mortgage rate measured by the Mortgage Bankers Association’s latestweekly survey ticked higher to 4.49% from 4.48% a week earlier, and has been stuck in a narrow band for several weeks now. That survey also showed mortgage applications fell by 12.8% in the holiday-shortened Thanksgiving week.
