Good jobs report leads to today's mortgage rate jump, says Freddie

Sandy Smith's picture

Today's mortgage rates for fixed-rate mortgages rose sharply on the Freddie Mac weekly survey, confirming the end of the two-month-long decline.

The average rate for a 30-year fixed-rate mortgage jumped 18 basis points on this week's survey, crossing back above 4% to 4.12% with an average 0.8 discount and origination fee points. The average rate for a 15-year fixed-rate mortgage rose 11 points to 3.37% with 0.8 points, and the average rate for a 5-year ARM rose 10 points to 3.06% with 0.6 points. Only the average rate for a 1-year ARM fell, dropping 5 points to 2.9%.

According to Freddie Mac Vice President and Chief Economist Frank Nothaft, unexpectedly good news on the employment front is the reason for the sudden reversal of direction. "An employment report that was better than market expectations helped to lift long-term Treasury bond yields and mortgage rates as well. The economy added 103,000 workers in September, aided by the return of striking Verizon workers. In addition, revisions to July and August figures added a total of 99,000 jobs to payrolls. However, these job gains are still not large enough to bring down the current unemployment rate of 9.1 percent."

Even with the rise, mortgage rates today remain extremely low. This week's rates on the Freddie Mac survey are anywhere from 7 to 53 points below their levels of one year ago.

Today's mortgage rates lower for day, higher for week on overnight surveys

The overall up trend continues for the week on the major overnight surveys, but the daily movements reversed their upward momentum. Whether they resume it will depend on a number of events, including some occurring abroad.

This morning's average mortgage rates on the Bankrate.com overnight survey, with changes from yesterday and one week ago, are: 30-year fixed, 4.17% (-3 points, +13 points); 15-year fixed, 3.47% (-3 point, +9 points); 5-year ARM, 3.06% (-2 points, +4 points); 30-year fixed refinance loan, 4.27% (-2 points, +12 points).

Yesterday's average afternoon mortgage rates on the Zillow.com National Mortgage Marketplace, with changes from Wednesday and one week ago, are: 30-year fixed, 4.02% (-1 points, +18 points); 15-year fixed, 3.4% (-2 points, +18 points); 5-year ARM, 2.9% (-2 points, +17 points). Today's real-time rates as of 8 a.m., with changes from yesterday morning and afternoon, are: 30-year fixed, 3.97% (-5 points, -5 points); 15-year fixed, 3.34% (-6 points, -6 points); 5-year ARM, 2.76% (-4 points, -14 points).

One basis point equals one hundredth of a percentage point. Rates reported in this article assume good credit (FICO score of 650 or higher) and a 20% down payment. Morning rates from Zillow.com are for loans for the most creditworthy borrowers (FICO score of 720 or higher). One discount point represents one percent of the total value of a mortgage, paid as interest up front.

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