By Crissinda Ponder • Bankrate.com
Mortgage rates fell this week following the release of a disappointing jobs report. U.S. employers added 142,000 jobs in September, according to the Bureau of Labor Statistics. The rate was much lower than the 200,000 that analysts expected.
On the other hand, yields on government bonds have been gradually increasing after falling last week, as investors decided to take on more risk in the stock market, MarketWatch reports. The yield on the 10-year Treasury note is up from about 1.92% on Oct. 2 to around 2.07% Wednesday afternoon.
“I think the stock market’s rallying on the idea that the (Federal Reserve) may be on hold longer or be more accommodative longer,” says Michael Becker, branch manager for Sierra Pacific Mortgage in White Marsh, Maryland. Usually, when stocks rally, bonds sell off, Becker adds.
Mortgage applications soared by 25.5% last week compared with the week prior, according to the Mortgage Bankers Association’s weekly survey. Refinances were up 24% and purchases increased by 27%. Aside from the dip in mortgage rates, the surge in applications could be attributed to borrowers rushing to submit their paperwork before changes in the mortgage disclosure forms went into effect Oct. 3.
Nationwide, home prices increased 1.2% from July to August and 6.9% from August 2014 to August 2015, according to a new report from CoreLogic.
“The strong price increases are lifting a lot of boats from underwater to good condition,” says Joel Naroff, president and chief economist for Naroff Economic Advisors in Holland, Pennsylvania. “That should create increasing numbers of homes on the market and since inventory has been a restraining factor, sales should rise.”
A look at rates this week
The benchmark 30-year fixed-rate mortgage fell to 3.95% from 4.01%, according to Bankrate.com’s Oct. 7 survey of large lenders. A year ago it was 4.18%. Four weeks ago, the rate was 4.05%. The mortgages in this week’s survey had an average total of 0.19 discount and origination points. Over the past 52 weeks, the 30-year fixed rate has averaged 3.99%. This week’s rate is 0.04 percentage points lower than the 52-week average.
The benchmark 15-year fixed-rate mortgage fell to 3.15% from 3.18%.
The benchmark 30-year fixed-rate jumbo mortgage rose to 3.9% from 3.87%.
The benchmark 5/1 adjustable-rate mortgage fell to 3.17% from 3.19%.
