Mortgage Rates Rebound

By:: Kara Johnson | October 13, 2011

Mortgage interest rates rose sharply this week on the strength of improved economic news, including better-than-expected employment figures and signs that the European debt crisis may be easing.

Average interest rates on 30-year fixed-rate mortgages jumped to 4.12 percent this week, according to the weekly Freddie Mac rate survey, up from last week’s all-time low of 3.96 percent. Current mortgage Interest rates on 15-year fixed-rate home loans rose to 3.37 percent, up from 3.26 percent last week, also an all-time low, while initial rates on five-year Treasury indexed adjustable rate mortgages hit 3.06 percent, up from 2.96 percent last week.

“An employment report that was better than market expectations helped to lift long-term Treasury bond yields and mortgage rates as well,” said Frank Nothaft, Freddie Mac chief economist. “The economy added 103,000 workers in September, aided by the return of striking Verizon workers. In addition, revisions to July and August figures added a total of 99,000 jobs to payrolls.”

Even so, the improved job numbers were not enough to bring down the official unemployment rate, which stands at 9.1 percent, Nothaft said.

Interest rates were also buoyed by a surging stock market, which rose nearly 10 percent over seven trading days in their strongest rally in two and a half years, largely on the strength of reduced fears of a European debt default after a financial leaders there floated plans to address the sovereign debt crisis.

Mortgage rates tend to rise on good economic news, because lenders have to pay higher rates to encourage investors to put their money into mortgages, rather than investing their money elsewhere.

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National Rates

Loan Type	Today	+/-
30 yr fixed	3.72
15 yr fixed	3.03
5/1 ARM	2.75

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