On the heels of a disappointing month of job growth, Freddie Mac reported Thursday that average mortgage rates are down across the board.
Freddie Mac’s latest Primary Mortgage Market Survey showed that the average 30-year fixed-rate mortgage dropped from 3.70 to 3.66 percent over the past week, inching the rate ever closer to a full percentage point behind where it was a year ago, 4.34 percent. Fifteen-year fixed-rate mortgages dropped by exactly the same amount, to 2.93 percent, which is slightly more than a full percentage point behind this time last year.
Variable-rate mortgages were down as well. According to Freddie Mac, 5-year Treasury-indexed hybrid adjustable-rate mortgages averaged 2.83 percent this week, down from last week’s 2.92 percent. A year ago, the 5-year ARM averaged 3.09 percent. However, 1-year Treasury-indexed ARMs maintained at 2.46 percent, almost unchanged from a year ago.
Len Kiefer, deputy chief economist at Freddie Mac, cited the latest‒‒and to many, surprisingly sluggish‒‒job growth numbers released by the Bureau of Labor Statistics last week in the latest PMMS report. In March, months of solid gains in an increasingly healthy labor market came up short of expectations. According to the BLS, March saw the addition of 126,000 new jobs, which is 121,000 fewer jobs than were expected.
In the 12 months leading up to March, each month saw an average of 266,000 new jobs added. Meanwhile, jobless claims have dropped to 268,000, “much lower than market expectations of 285,000,” Kiefer says.
According to the BLS, the unemployment rate remained at 5.5 percent‒‒its lowest level since 2008‒‒from February to March. However, in February, Doug Duncan, chief economist at Fannie Mae, attributed declining unemployment to people leaving the labor force.
One bright spot is pay. “We did see some uptick in wages,” Kiefer said. “Average hourly earnings increased 7 cents for the month and are up 2.1 percent over the year.” The average hourly wage is now $24.86; Duncan said that higher wages are necessary to bolster growth in the housing market.