Mortgage Rates Moved Up Last Week
Last week was a test for mortgage rates. A less-than stellar jobs report was released, and yet mortgage rates moved higher. Whether this test was passed or failed depends on whether you are a homebuyer.
According to BankRate’s weekly survey, the national average rate on 30-year fixed mortgage rate moved from 4.24% to 4.27%. The 15-year fixed moved from 3.37% to 3.42%, while the 5/1 ARM moved from 3.25% to 3.29%.
These aren’t huge moves, but they are interesting in light of the disappointing jobs report released last week. Normally, a report like that would lead to lower bond yields, and thus mortgage rates. Yet, this isn’t what happened.
Instead, the markets were watching the Federal Reserve, to gauge its reaction to the jobs numbers. If the Fed had signaled some about-face in its plan to raise rates in the first half of 2015 – in light of this unexpectedly mediocre jobs report – than we could well have seen a pullback in bond yields, and mortgage rates.
However, the Fed so far plans to continue its current policy of tapering off on bond purchases, and to easing interest rates higher next year. So, mortgage rates moved higher.
If the Fed follows through on its plan, we can certainly expect mortgage rates to move higher still.
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