Mortgage rates continue to seesaw back and forth with the market uncertain about how long the Federal Reserve’s aggressive bond-buying program will actually last.
This week rates ticked back up again, with the 30-year, fixed-rate mortgage coming in at 4.51%, up from 4.29% last week and 3.56% last year, Freddie Mac reported in its Primary Market Survey.
The 15-year, FRM increased to 3.53%, up from 3.39% last week and a steep rebound from 2.86% last year.
Meanwhile, the 5-year Treasury-index adjustable-rate mortgage averaged 3.26%, up from 3.10% last week and an increase from 2.74% a year earlier.
Additionally, the 1-year Treasury-index ARM was 2.66%, unchanged from a week earlier, but down from 2.69% a year ago.
“June’s strong employment led to more market speculation that the Federal Reserve will reduce future bond purchases causing bond yields to rise and mortgage rates followed,” said Frank Nothaft, vice president and chief economist for Freddie Mac.
He added, “The economy gained 195,000 jobs in June, above the market consensus forecast, while revisions to the prior two months added 70,000 on top of that. Moreover, hourly wages rose by 2.2 percent over the last 12 months and represented the largest annual increase in nearly two years. However, the minutes of the June 18th and 19th Federal Reserve’s monetary policy committee meeting, released July 10th, stated that many members indicated further improvement in the outlook for the labor market would be required before it would be appropriate to slow the pace of bond purchases.”
Bankrate data also shows mortgage rates increasing again.
Bankrate’s 30-year FRM rose to 4.66% from 4.48% a week earlier.
In addition, the 15-year, FRM increased to 3.75%, up from 3.62% The 5/1 ARM also rose to 3.63% from 3.48%.