The average rate for a 30-year fixed mortgage was 3.17%, up from 3.13% last week. The rate for a 15-year fixed mortgage was 2.50%, up slightly from 2.49%.
The mortgage market has been volatile of late with rates inching up and down in response to various factors such as Fed policy, economic data, international trade issues and other geopolitical developments. This week, the markets were focused on the Fed’s announcement that it would be keeping interest rates steady, along with stronger-than-expected economic data.
The latest Employment Situation Report from the Bureau of Labor Statistics showed that nonfarm payrolls rose by 225,000 in January. That was much higher than the 160,000 new jobs analysts had been expecting. The unemployment rate held steady at 3.6%, while average hourly wages were up 3 cents to $28.44.
The news helped push mortgage rates higher. Other upbeat economic data also had an impact. The Institute for Supply Management's Purchasing Managers' Index (PMI) rose to 50.9 in January, up from 47.8 in December and its highest level since August. The ISM's New Orders Index also rose to 52.2, its highest level since August.
The movement of mortgage rates this week is likely to be mixed. On the one hand, strong economic data will support higher rates. On the other hand, the lack of any major news on the coronavirus front may be a form of relief for financial markets, leading them in a more risk-averse direction which could lead to lower rates.
Looking ahead, the housing market should remain strong in the coming months, despite higher rates. Mortgage applications have been rising steadily in recent weeks, suggesting that buyers are still eager to enter the market. Low unemployment, strong economic growth, and decades-low mortgage rates should help propel the housing market forward.
In summary, mortgage rate trends moved higher on Friday, according to data provided by Freddie Mac. The average rate for a 30-year fixed mortgage was 3.17%, up from 3.13% last week, and the rate for a 15-year fixed mortgage was 2.50%, up slightly from 2.49%. The increase was due to the Federal Reserve's decision to keep interest rates steady and the strength of economic data including nonfarm payrolls, wages, the PMI and the ISM's New Orders Index. While there is a likelihood that mortgage rates may move in either direction this week, the housing market is likely to remain strong due to low unemployment, strong economic growth, and historical low mortgage rates.
This article was contributed on Nov 17, 2023