Average fixed mortgage rates are continuing to rise amid strong jobs report and are bringing mortgage rates back to where they were at the start of 2015, according to Freddie Mac’s Primary Mortgage Market Survey released Thursday. The rise is a positive sign for Freddie Mac Deputy Chief Economist Len Kiefer’s prediction that 2015 would be the best year in housing since 2007.
Kiefer, who will be a keynote speaker at the upcoming Five Star Government Forum in Washington, D.C. on March 18, said in Freddie Mac's March 2015 Economic and Housing Market Outlook the big reason for the bright outlook for housing is the improved job market for Millennial home buyers. Analysts agree the future of housing depends on taping into this key demographic. Last year, nearly 20 percent of Millennials were unemployed. That number is slowly decreasing and employment among this generation is inching closer to its peak level of 2008.
“Overall, we're feeling good about housing and we expect this year to be the best year for home sales and new home construction since 2007 when we saw total home sales about 5.8 million for the year,” Kiefer said in the report.
The 30-year fixed-rate mortgage (FRM) averaged 3.86 percent with an average 0.6 point for the week ending March 12, 2015, up from last week when it averaged 3.75 percent. A year ago at this time, the 30-year FRM averaged 4.37 percent. The 15-year FRM this week averaged 3.10 percent with an average 0.6 point, up from last week when it averaged 3.03 percent. A year ago at this time, the 15-year FRM averaged 3.38 percent.
"The average 30-year fixed-rate mortgage rose to 3.86 percent for this week following a strong labor market report, essentially bring rates back to where they were at the start of the year,” Kiefer said. “The U.S. economy created 295,000 jobs in February while the unemployment rate dipped to 5.5 percent from 5.7 percent in January, both outperforming market expectations."
The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.01 percent this week with an average 0.5 point, up from last week when it averaged 2.96 percent. A year ago, the 5-year ARM averaged 3.09 percent. The 1-year Treasury-indexed ARM averaged 2.46 percent this week with an average 0.4 point, up from last week when it averaged 2.44 percent. At this time last year, the 1-year ARM averaged 2.48 percent.