Average long-term U.S. mortgage rates are lower this week, closer to their lows for the year just in time for the spring home-buying season.
A week jobs report last week put downward pressure on the average 30-year fixed rate, which moved from 3.70 percent to 3.66 percent this week, according to Freddie Mac.
A year ago, the average 30-year mortgage rate was 4.34 percent. The lowest point for the 30-year fixed rate this year was in early February when it dipped to 3.59 percent.
The Labor Department report last week signal that a slowdown in the U.S. economy may have affected the job market in March as employers added just 126,000 jobs — the fewest since December 2013.
“Mortgage rates fell across the board following last week’s disappointing employment report,” said Len Kiefer, deputy chief economist, Freddie Mac. “The US economy added 126,000 new jobs in March, well below market expectations of 247,000 jobs.
There were some positives. “We did see some uptick in wages, as average hourly earnings increased 7 cents for the month, and are up 2.1 percent over the year. Meanwhile, jobless claims fell sharply to 268,000 this week, much lower than market expectations of 285,000, ” he added.
Federal Reserve officials disagreed widely when they met last month on the time-frame for lifting short-term interest rates. Minutes of the March 17-18 meeting released Wednesday show that several policymakers expected a rate hike in June, while others concerned about low inflation didn’t think a rate hike would be warranted until later this year. Some even said the U.S. economy would not be solid enough for an increase until 2016.
The Fed has held the federal funds rate — the interest rate at which banks and other depository institutions lend money to each other — at “near zero” since December 2008. The federal funds rate is seen as the base rate that determines the level of all other interest rates in the U.S. economy, include those tied to mortgages, auto loans and credit cards.
Here is Freddie Mac’s overview of mortgage rates for the week:
30-year fixed-rate mortgage (FRM) averaged 3.66 percent, with an average 0.6 point for the week ending April 9, 2015, down from last week when it averaged 3.70 percent. A year ago at this time, the 30-year FRM averaged 4.34 percent.
15-year FRM this week averaged 2.93 percent, with an average 0.6 point, down from last week when it averaged 2.98 percent. A year ago at this time, the 15-year FRM averaged 3.38 percent.
5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.83 percent this week, with an average 0.5 point, down from last week when it averaged 2.92 percent. A year ago, the 5-year ARM averaged 3.09 percent.
1-year Treasury-indexed ARM averaged 2.46 percent this week with an average 0.4 point, unchanged from last week. At this time last year, the 1-year ARM averaged 2.41 percent.