Mortgage rates jumped to 3.69% from 3.55% this week, Freddie Mac reported Thursday.
Freddie’s Primary Mortgage Market Survey (PMMS) found that the 30-year fixed-rate mortgage (FRM) averaged 3.69%. A year ago at this time, the 30-year FRM averaged 2.73%.
“The normalization of the economy continues as mortgage rates jumped to the highest level since the emergence of the pandemic,” said Sam Khater, Freddie Mac’s Chief Economist.
“Rate increases are expected to continue due to a strong labor market and high inflation, which likely will have an adverse impact on homebuyer demand.”
The economy is slowly recovering. The Fed has said the labor market has recovered enough to implement rate hikes, with Fed Chairman Jerome Powell saying “labor market conditions have reached levels consistent with the Committee’s assessments of maximum employment.”
The latest jobs report from the U.S. Bureau of Labor Statistics shows payroll employment growth as 467,000 in January and an increase of job growth at 1.8 million in the last three months of 2021.
But there is still uncertainty about how these numbers will impact the housing market.
“I know it was a good number and that a lot of jobs were added. But if you look at the details, you see that so many of these are in the leisure and hospitality areas. Which is, quite possibly the lower-paying jobs,” Elizabeth Rose, a Financial Planner and Lender with Mortgage 300 based in Dallas, Texas, told The Mortgage Note.
“Also, when I drive down the street, I see McDonald’s is hiring for $17 an hour and Starbucks is offering $22 an hour. It’s the last of people getting work. They can’t find people willing to work. I wonder how much of that is playing into that 5% pop.”
Additional findings from Thursday’s report:
- 15-year fixed-rate mortgage averaged 2.93% with an average 0.8 point.
- A year ago at this time, the 15-year FRM averaged 2.19%.
- 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.80% with an average 0.3 point.
- A year ago at this time, the 5-year ARM averaged 2.79%.