The push-pull of good news and bad news on the economy continued last week, leaving economists wondering about what the Federal Reserve will do and causing volatility in the stock market. Mortgage rates last week rose to some of the highest rates in the past two years.
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 4.75 percent -- exactly the same amount it declined during the previous week. Average rates for 15-year fixed-rate mortgage loans rose by 6 basis points (0.06 percent) to 3.82 percent, the highest rate for this loan product since July 2011. FHA-insured, 30-year fixed-rate home loan rates rose by 10 basis points (0.10 percent) to an average rate of 4.36 percent, the exact same amount this product dropped in the previous week. The average rate for a 5/1 Hybrid Adjustable Rate Mortgage (ARM), increased by 4 basis points (0.04 percent) to an average rate of 3.45 percent. Compare mortgage rates for your area before refinancing or applying for a purchase loan.
On the good news side, auto sales in August rose to their highest level since the end of 2007 and the Institute for Supply Management report on manufacturing businesses rose for the second month in a row. The Federal Reserve estimates the second quarter GDP growth is about 2.5 percent and that third-quarter growth will be similar. Unemployment claims stayed low for the week ending August 31.
The bad news came on Friday, September 6, when the Commerce Department reported that just 169,000 new jobs were created in August and that 74,000 fewer jobs than previously thought were created in June and July. Worse, the nation's labor force declined to 63.2 percent of the eligible population, the lowest level since the recession ended.
In spite of the negative jobs report, the mortgage experts at HSH.com anticipate that mortgage rates will stay the same or rise slightly this week.
Our live database of current mortgage rates can help you find the best mortgage rates in your area.