Mortgage Rates Climb After Job Gains Fuel Fed Speculation
Mortgage rates increased as the improving job market bolstered speculation that the Federal Reserve will keep scaling back its stimulus.
The average rate for a 30-year fixed mortgage was 4.37% this week, up from 4.28%, Freddie Mac said today. The average 15-year rate rose to 3.38% from 3.32%, the McLean, Va.-based mortgage-finance company said.
Yields for 10-year U.S. Treasuries, a benchmark for mortgage rates, climbed after a Labor Department report last week showed the U.S. added 175,000 jobs in February, more than economists predicted. The gain fueled expectations that the Central Bank will continue cutting the bond purchases that have kept borrowing costs low.
"The jobs report is one of the primary indicators of the health of the economy, and the extent to which it beat expectations suggested that the recovery seems to be moving along quite well," Erin Lantz, director of mortgages at Seattle-based Zillow Inc., said in a telephone interview yesterday.
"As the economy improves, we expect the government can wind down its stimulus program and let the economy move forward on its own."