Business
Mortgage rates rise on jobless figures
01:00 AM EDT on Sunday, October 14, 2007
WASHINGTON — Rates on 30-year mortgages edged up slightly last week following a better-than-expected report on job growth.
Freddie Mac, the mortgage company, reported Thursday that 30-year, fixed-rate mortgages averaged 6.40 percent, up from 6.37 percent the previous week.
In mid-September, the nationwide average for 30-year mortgages had dipped to 6.31 percent, the lowest level since May 17.
Analysts attributed last week’s rise in mortgage rates to a better-than-expected jobs reports, showing that the economy created a solid 110,000 jobs in September and, even more significantly, a drop of 4,000 jobs in August was revised away. New data showed the economy actually created a respectable 89,000 jobs in August.
Frank Nothaft, chief economist at Freddie Mac, said the slight rise in rates also reflected a feeling in bond markets that future rate cuts by the Federal Reserve are less certain. Nothaft said investors now see about a 30-percent chance of a quarter-point rate cut at the Fed’s next meeting Oct. 30-31, down from a 50-percent likelihood before the release of the minutes of the Fed’s September meeting, where the central bank had cut rates for the first time in four years.
Rates on 15-year fixed-rate mortgages, a popular choice for refinancing, averaged 6.06 percent, up from 6.03 percent.
Rates on five-year adjustable-rate mortgages averaged 6.12 percent, up from 6.11 percent. One-year ARMs averaged 5.73 percent, up from 5.58 percent.
The mortgage rates do not include add-on fees known as points. Thirty-year mortgages carried a nationwide average fee of 0.4 point, while 15-year and five-year mortgages both carried an average fee of 0.5 point. One-year adjustable-rate mortgages had an average fee of 0.6 point.
A year ago, 30-year mortgages stood at 6.37 percent, 15-year mortgages at 6.06 percent, 5-year ARMS at 6.10 percent and one-year ARMs at 5.56 percent.
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