Weak Job Report Prompts Dropping Rates

Amid a newly released weaker than expected jobs report, mortgage rates were back on a downward spiral this week. For the 11th consecutive week, the average on 30-year mortgage rates has stayed below 4 percent. Also, the 15-year fixed-rate mortgage dropped below 3 percent this week, the first time since April this year, Freddie Mac reports.

“Calling the September jobs report disappointing is an understatement,” says Sean Becketti, Freddie Mac’s chief economist. “The sputtering U.S. economy added only 142,000 jobs. To make matters worse, there were downward revisions to the prior two months. Hourly wages were flat, and the labor force participation rate fell to 62.4 percent, the lowest rate since 1977. In response, Treasury yields dipped below 2 percent triggering a 9 basis point tumble in the 30-year mortgage rate to 3.76 percent.”

Freddie Mac reports the following national averages with mortgage rates for the week ending Oct. 8:

  • 30-year fixed-rate mortgages: averaged 3.76 percent, with an average 0.6 point, dropping from last week’s 3.85 percent average. Last year at this time, 30-year rates averaged 4.19 percent.
  • 15-year fixed-rate mortgages: averaged 2.99 percent, with an average 0.6 point, dropping from last week’s 3.07 percent average. A year ago, 15-year rates averaged 3.36 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 2.88 percent, with an average 0.4 point, falling from 2.91 percent last week. A year ago, 5-year ARMs averaged 3.06 percent.
  • 1-year ARMs: averaged 2.55 percent, with an average 0.2, rising from 2.53 percent last week. A year ago, 1-year ARMs averaged 2.42 percent.

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