Mortgage Rates Increase as Employment Report Awaited
Mortgage rates rose as investors awaited this week’s jobs report and signs that the economy is rebounding after the disruption caused by harsh winter weather.
The average rate for a 30-year fixed mortgage was 4.41% this week, up from 4.4%, according to a statement today from Freddie Mac. The average 15-year rate climbed to 3.47% from 3.42%, the McLean, Va.-based mortgage finance company said.
Economists predict a Labor Department report tomorrow will show that employment picked up, bolstering speculation that the Federal Reserve will raise interest rates next year. Reduced affordability for homes, based on higher prices and borrowing costs, and poor weather in much of the U.S. have contributed to a slowdown in home purchases in recent months.
“What we’re waiting for is economic news to know whether or not the winter was the cause for the stumble in economic growth,” Keith Gumbinger, vice president of HSH.com, a Riverdale, N.J.-based mortgage data firm, said in a telephone interview yesterday.
The average 30-year rate has climbed from 3.54% a year ago as the Fed began to scale back its unprecedented stimulus aimed at reducing borrowing costs. The central bank has reduced bond purchases by $10 billion a month at each of its past three meetings, to $55 billion, and Chair Janet Yellen said last month that interest rates may rise “around six months” after it stops buying debt.
New home purchases dropped in February to the lowest level in five months, Commerce Department data showed. Sales of existing houses fell last month to a 4.6 million annual rate, the fewest since July 2012, according to the National Association of Realtors.
Beazer Homes USA Inc., an Atlanta-based homebuilder, today reported a 9% drop in orders for the quarter ended March 31. The results were hurt by a decline in its communities and severe weather along the East Coast, the company said.