Interest rates for mortgage loans, which continue to remain at historic lows, saw another increase for the second time this year.
The report showed that the 30-year fixed mortgage rate averaged 3.68 percent with an average 0.5 point for the week ending March 10, 2016. Last week the 30-year rate averaged 3.64 percent.
"The 10-year Treasury yield ended the survey week exactly where it started, however the solid February employment report boosted the yield noticeably on Friday and Monday," said Sean Becketti, Chief Economist, Freddie Mac. "Our mortgage rate survey captured the impact of this temporary increase in yield, and the 30-year mortgage rate rose 4 basis points to 3.68 percent. This marks the second increase this year. Nonetheless, the mortgage rate remains 33 basis points lower than its end-of-2015 level."
The February 2016 Employment Summary from the Bureau of Labor Statistics (BLS) showed a mixed bag in the U.S. labor market. While February’s job gains were solid at 242,000 and the labor force participation rate shot up to a 15-month high, a noticeable weakness in the labor market is wage growth.
Amid all the positives in the February employment summary, however, the average hourly earnings for all employees declined by 3 cents down to $25.35 after an increase of 12 cents in January. The average workweek also declined in February by 0.2 hours down to approximately 34.4 hours. The lack of wage growth combined with house price appreciation has caused some concenrs as far as affordability in the housing market, according to Fannie Mae chief economist Doug Duncan.
“On the housing front, builders continue to hire more workers, but at a steadily slowing pace since last November, suggesting little relief to one factor underlying extremely tight inventories,” Duncan said. “Our forecast of a more modest gain in home sales this year reflects our concern of declining housing affordability from income growth that is trailing home price appreciation. Today’s jobs report is consistent with our view of an affordability-constrained housing expansion.”
According to Freddie Mac, the 15-year FRM averaged 2.96 percent this week with an average 0.5 point, up from last week when it averaged 2.94 percent. The 15-year FRM averaged 3.10 percent a year ago at this time.
The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.92 percent this week with an average 0.4 point, the report showed. Last week, the five-year Treasury-indexed hybrid ARM averaged 2.84 percent and one year ago, it averaged 3.01 percent.