Fixed Mortgage Rates Rise for Second Consecutive Week
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UPDATED: Aug 15, 2012
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After nearly three months of record breaking interest rates, fixed home loan rates turned around at the start of August and have continued their upward trajectory for a second consecutive week.
Freddie Mac announced that interest rates for 30-year fixed home loans rose to 3.59 percent, which is a 0.04 percent increase from last week’s average.
15-year home loans also saw a slight increase, rising to 2.84 percent which is up 0.01 percent from last week’s reported average.
However, adjustable rate home loans haven’t yet been influenced as much as their fixed-rate counterparts.
While the 5-year adjustable rate rose to 2.77 percent this week—a 0.02 percent increase—the 1-year adjustable mortgage rate fell by a full 0.05 percent, landing at 2.70 percent.
“Fixed mortgage rates inched up again this week following stronger-than-expected employment reports,” said Frank Nothaft, the vice president and chief economist of Freddie Mac. “The economy added 163,000 jobs in July, well above the market consensus forecast of 100,000, and the largest increase since February.”
Nothaft also cited that job loss statistics were drastically lower than last month’s figures.
“The number of corporate layoffs fell 45 percent in July compared to last July and was the third time this year that announced layoffs were less than the same month in 2011 according to the Challenger Report. This suggests further net gains in employment are likely in the near future,” he said.
If Nothaft’s reasoning for the rate increase is correct, and if the job market is beginning to find its footing, then home loan interest rates may continue their upward trajectory in the weeks and months ahead.
But even with these encouraging numbers, the economy doesn’t appear to be recovering as it should.
“Since World War II, 10 U.S. recessions have been followed by a recovery that lasted at least three years. An Associated Press analysis shows that by just about any measure, the one that began in June 2009 is the weakest,” reported The Associated Press.