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Mortgage Rates Climb Higher Following Steep Fall Last Week

After hitting rock bottom last week, mortgage rates returned to previous lows on a somewhat tenuous climb this week as European central bankers seemed to reach a deal and a U.S. jobs report netted better-than-expected results.


Mortgage giant ""Freddie Mac"":http://www.freddiemac.com/ released the ""Primary Mortgage Market Survey"":http://www.freddiemac.com/pmms/, evened by a weekly survey also released by finance Web site ""Bankrate.com"":http://www.bankrate.com/.

Leaping forward from a history-making 3.94 percent last week, interest rates for the 30-year fixed-rate mortgage rose to 4.12 percent, albeit a few percentage points below 4.19 percent seen for the loan last year, according to Freddie. Bankrate.com offered up similar results, showcasing a 4.37-percent 30-year loan rate this week, up from 4.21 percent last week.

Fifteen-year fixed-rate mortgages operated in the same vein, with Bankrate.com finding 3.59 percent for the loan this week, compared with 3.46 percent last week. For Freddie, interest rates for the 15-year loan jumped from 3.26 percent last week to 3.37 percent this week, still a far cry from 3.62 percent seen at the same time last year.

For 5-year and 1-year Treasury-indexed adjustable-rate mortgages (ARMs), Bankrate.com reported a rise from 3.11 percent last week to 3.26 percent this week.


Freddie offered marginal increases for rates for 5-year, which climbed from 2.96 percent last week to 3.06 percent this week.

The GSE noted a decline in 1-year ARMs this week, with interest rates falling to 2.90 percent, down from 2.95 percent last week.

Commenting on Freddie's figures in a ""statement"":http://freddiemac.mediaroom.com/index.php?s=12329&item=68931, ""Frank Nothaft"":http://www.freddiemac.com/bios/exec/nothaft.html, the GSE's VP and chief economist said, ""An employment report that was better than market expectations helped to lift long-term Treasury bond yields and mortgage rates as well.

""The economy added 103,000 workers in September, aided by the return of striking Verizon workers,"" he continued. ""In addition, revisions to July and August figures added a total of 99,000 jobs to payrolls.

""However,"" he said, ""these job gains are still not large enough to bring down the current unemployment rate of 9.1 percent.""

Bankrate.com tempered news about the mortgage rates in a ""statement"":http://phx.corporate-ir.net/phoenix.zhtml?c=61502&p=irol-newsArticle&ID=1616739&highlight, with the finance Web site saying, ""This optimism could prove temporary. All it takes is a hiccup in Europe or disappointing earnings or economic news on this side of the Atlantic, and mortgage rates will head right back down.""

Last week the ""Labor Department"":http://www.dol.gov/ released a ""savory payroll report"":https://themreport.com/articles/dispelling-fears-us-adds-137000-jobs-in-september-2011-10-07 that saw the U.S. economy add a seasonally adjusted 103,000 jobs.

That same day, ""stocks and shares for financial institutions ticked up"":https://themreport.com/articles/bank-shares-lift-on-news-of-europe-bailout-deal-2011-10-10 on news that German Chancellor Angela Merkel and French President Nicolas Sarkozy had shaken hands over a tentative deal to bail out debt-ridden Greece.

The rise in mortgage rates this week follows a ""1.3-percent jump in mortgage applications"":https://themreport.com/articles/mortgage-applications-tick-up-13-2011-10-12 last week, as reported by the ""Mortgage Bankers Association"":http://mbaa.org/default.htm.

About Author: Ryan Schuette

Ryan Schuette is a journalist, cartoonist, and social entrepreneur with several years of experience in real-estate news, international reporting, and business management. He currently lives in the Washington, D.C., area, where he freelances for DS News and MReport.

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