Mortgage Rates Up Slightly This Past Week

Rates on 30-year mortgages rose this week to the highest level since mid-November after a better-than-expected employment report renewed inflation worries in financial markets, the Detroit Free Press reports.

Government-charterered mortgage giant Freddie Mac reported Thursday that 30-year, fixed-rate mortgages averaged 6.21 percent this week, up from 6.18 percent last week.

It was the highest level since 30-year, fixed mortgage rates stood at 6.24 percent the week of November 16.

Analysts said that U.S. financial markets were reacting to a stronger reading on employment with 167,000 jobs created in December, the best showing in three months.

“The gain in employment in December exceeded the consensus forecast and helped ease fears about the state of the economy,” said Frank Nothaft, Freddie Mac’s chief economist.

“But stronger employment and higher wages put upward pressure on inflation, which in turn, translates into higher interest rates.”

Nothaft, however, said he did not feel home loan rates would rise very far this year, predicting that 30-year rates would not top 6.5 percent.

The Freddie Mac survey showed that other types of mortgage loans saw only slight increases this week in regards to the borrowing costs consumers paid.

Rates on 15-year, fixed-rate mortgages, a popular choice for mortgage refinancing, edged up slightly to 5.96 percent, having come in at 5.94 percent last week.

One-year ARMs remained even for the week. A year ago, home mortgage rates on 30-year mortgages stood at 6.15 percent while 15-year fixed-rate mortgage rates were at 5.71 percent.