Bankrate: Mortgage Rates Dip Following Uneventful Employment Report

Fixed mortgage rates dipped again, falling for the eighth time in the past 10 weeks. The average 30-year fixed mortgage rate is now 6.45 percent. According to Bankrate.com’s weekly national survey of large lenders, the 30-year fixed rate mortgages had an average of 0.33 discount and origination points.

The average 15-year fixed rate mortgage popular for refinancing slid to 6.14 percent. On larger loans, the average jumbo 30-year fixed rate ticked lower to 6.72 percent. Adjustable rate mortgages inched higher. The average 5/1 adjustable rate mortgage increased to 6.24 percent, and the average one- year ARM nosed upward to 5.99 percent.

Fixed mortgage rates were slightly lower after the August employment report came in nearly on target with forecasts, a rare event. With job growth at moderate levels, any concerns about a sharp economic slowdown were alleviated. But job growth wasn’t so strong as to ignite fears the Fed may need to resume raising interest rates. However, inflation does remain a risk to bond yields and mortgage rates in the coming weeks, as evidenced by Wednesday’s revelation of higher unit labor costs. Another reading on the Consumer Price Index will be delivered prior to the Federal Open Market Committee’s next meeting on Sept. 20. Fixed mortgage rates are closely related to yields on long-term government bonds.

Fixed mortgage rates are nearly one-half percentage point lower than when the Fed last hiked rates at the end of June. At the time, the average 30-year fixed mortgage rate was 6.93 percent, meaning that the monthly payment on a loan of $165,000 was $1,090. With the average 30-year fixed rate now 6.45 percent, the same loan originated today would carry a monthly payment of $1,037.49. Fixed mortgage rates remain an attractive refinancing alternative for adjustable rate borrowers facing sharp payment adjustments.