Fixed mortgage rates on the rise

A stronger-than-expected October employment rate helped push rates on fixed rate mortgages (FRMs) higher during the week ending November 14,
Freddie Mac reports the average rate for the 30-year FRM rose to 4.35% from 4.16%, putting the rate at its highest level since September 19, 2013, when it averaged 4.50%. A year ago at this time, the 30-year FRM averaged 3.34%.
The 15-year FRM averaged 3.35%, up 8 basis points from last week's averaged of 3.27%. The 15-year FRM averaged 2.65% a year earlier.
The average for the 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) was 3.01% this week , compared with 2.96% last week. Last year, the 5-year ARM averaged 2.74%.
One-year Treasury-indexed ARMs were unchanged this week, averaging 2.61% and up 6 basis points from 2.55% at this time last year.
Stronger than expected economic data releases were responsible for this week's increase in rates. “Nonfarm payrolls increased by 204,000 in October, above the consensus forecast,” noted Freddie Mac Vice President and Chief Economist Frank Nothaft. “In addition, revisions added 60,000 additional jobs to the prior two month releases,he said, adding, “preliminary estimates indicate Real GDP growth in the third quarter was 2.8% -- also above consensus."

Jobless claims

Separately, the government reports first-time applications for state unemployment benefits fell by 2,000
in the week ending November 9 to 339,000. Economists surveyed by Briefing.com had forecast a total of 330,000. The previous week's figure was revised higher by 5,000 to 341,000.
Analysts note that the Labor Department (DOL) had to estimate the initial claims levels for 5 states because of the Veterans Day holiday, but point out that these estimates are usually robust and should not result in a major revision in next week's data.
The 4-week moving average, which is less volatile and considered a more accurate barometer of the labor market, was down 5,750, from the previous week -- to 344,000.


By James Limbach