The jobs report for April, which showed 165,000 new jobs created, was complemented by upward revisions in jobs reports for both February and March. While the U.S. economy still lags, these positive reports, along with a decline in the unemployment rate to 7.5 percent and lower weekly unemployment claims for the past two weeks sent the stock market soaring. Mortgage rates also rose last week on the basis of the money flowing from the bond market into the stock market. Compare mortgage rates for your area before refinancing or applying for a purchase loan.
Mortgage rates start to rise
According to HSH.com, last week the overall average rate for a 30-year fixed-rate home loan rose by 7 basis points (0.07 percent) to 3.68 percent. Average rates for 15-year fixed-rate mortgage loans rose by 5 basis points (0.05 percent) to 2.91 percent. FHA-insured, 30-year fixed-rate home loan rates also rose by 5 basis points (0.05 percent) to an average rate of 3.31 percent. The average rate for a 5/1 Hybrid Adjustable Rate Mortgage (ARM) stayed close to its record low rate, rising just 2 basis points (0.02 percent) to 2.59 percent. The gap widened between ARMs and fixed-rate loans last week, which, if it continues, could spur new interest in this loan product.
Economic recovery seems to be gaining ground
Employment figures were the main news for the week ending May 3, but, partly because of rising optimism about an economic recovery, the Federal Reserve's survey of Senior Loan Officers found that underwriting standards for commercial and industrial loans are easing a little, as are standards for prime residential mortgages.
The mortgage experts at HSH.com anticipate that mortgage rates may rise again this week by another five or six basis points. Even so, mortgage rates are still near their record low rates and the Federal Reserve's survey indicates that mortgages may be easier to qualify for as well.
Our live database of current mortgage rates can help you find the best mortgage rates in your area.