Payroll expansion spurs mortgage rate gains

As the job market continues to build momentum, fixed mortgage rates recently edged higher for the second consecutive week.

As the job market continues to build momentum, fixed mortgage rates recently edged higher for the second consecutive week.

During the week ending August 9, the average rate for a 30-year FRM was 3.59 percent, up from 3.55 percent a week earlier, according to a report from Freddie Mac. Meanwhile, 15-year FRMs averaged 2.84 percent, which was slightly higher than the previous week, when they averaged 2.83 percent.

"Fixed mortgage rates inched up again this week following stronger-than-expected employment reports," said Freddie Mac vice president and chief economist Frank Nothaft.

Specifically, companies expanded payrolls in July by an estimated 163,000 positions, which was well above the market consensus forecast of 100,000, and represented that largest month-over-month increase since February, Nothaft added.

However, despite the notable job creation, the unemployment rate in July actually edged higher to 8.3 percent.

Additionally, corporate layoffs declined 45 percent in July from a year earlier, indicating that employment growth is expected in the future. If this occurs, more consumers could have the financial safety and soundness required to make major investments, such as purchase property.



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