The U.S. economy added more jobs than expected last month, and employment gains for the previous two months were revised higher-not great news considering the jobless rate is unchanged at 9.1 percent but good enough to stop mortgage rates from setting new records.
Today the BLS reported some l137,000 jobs wered added to private secgtor payrolls in September. Economists surveyed by Dow Jones Newswires expected payrolls would rise by 60,000 last month. As result, mortgage rates on a 30-year fixed moved above 4 percent after hitting an all-time record low earlier in the week.
The 30-year fixed-rate mortgage, dropped below 4 percent for the first time in modern history to 3.94 percent during the week ending Oct. 6, according to Freddie Mac’s weekly survey.
The general persistence of tight underwriting guidelines and a relatively high percentage of underwater loans in the market generally continue to limit the number of borrowers that can qualify.
Freddie’s survey for the most recent week also shows the average rate for a 15-year fixed-rate mortgage dropped two basis points to an all-time low at 3.28 percent, while the average rate for the five-year Treasury-indexed hybrid adjustable-rate mortgage slid 6 basis points to 2.96 percent.
Mortgage professionals saw rates rising and staying above 4 percent for the near term.
“For now, the outlook for the two factors that drove mortgage rates to new all-time lows, a weak US economy and fears over the EU debt crisis, appear better. As a result, mortgage rates have risen by about .25 percent,” said Evan Swanson a mortgage professional with Mortgage Trust, Inc., who believes the rates may rise in the near-term.
“From a technical perspective rate may get worse in the near-term. The 10yr Treasury note is currently at 2.09%. Should the 10yr Treasury yield close above 2.04% it would be a bad technical signal for rates. In that event I will shift my outlook to locking” he said.