By Mike Colpitts
Higher bond yields paid on U.S. Treasuries pushed mortgage rates higher for the week along with reports on increased hiring by employers. The fixed 30-year mortgage saw a jump to 3.92%, a four basis point nudge up over last week, according to Freddie Mac. Rates on shorter term fixed mortgages and adjustable loans also moved higher.
The fixed 15-year mortgage averaged 3.16% with an average of 0.8 point, a small three basis point jump. The 5-year Treasury indexed hybrid adjustable rate loan hit 2.83%, a two point basis point increase.
Mortgage rates have been kept low by the Fed’s stance on the economy and its capacity to keep borrowing rates it sets for lenders to borrow funds from the government low. The average 30-year fixed loan has been below 4.00% for 15 straight weeks.
However, lower mortgage rates have not yet fueled a revival of the housing market, which has seen a slow pace of sales for more than two years. An increase in sales seems to be developing in some areas of the nation as buyers turn out at new home subdivisions in larger numbers than in the past few years.
“The economy gained 227,000 jobs above the market consensus forecast and revisions added another 61,000 to January and December,” said Freddie Mac chief economist Frank Nothaft. “Job growth over the past six months was the strongest since 2006.”
Employers will have to increase their pace of hiring if the housing market is to recover any time soon. Most economists say that the U.S. economy needs to add 400,000 jobs a month to reach any sort of a healthy balance in the next five years. Home sales are directly affected by employment levels since the average employee has to be on the job for two years to qualify for a home mortgage.