Mortgage Rates edge up following a strong February Jobs Report

The Labor Department on Friday issued it’s monthly non-farm jobs report with another strong report showing strength taking hold in the economy.  Employers added 295,000 workers in February which also caused the unemployment rate to drop.  The data was positive in almost every area, except for wage growth which still has remained stubbornly steady.

Analysts had forecasted muted results due to unusually snowy weather in the Midwest and northeast.  But employers instead continued their hiring momentum of the previous three months and hired at a strong clip.  The unemployment rate fell to 5.5% which is down from 5.7% in January which is the lowest since 2008. 

Mortgage rates responded predictably by rising about an eighth of a percentage point on the news.  Mortgage interest rates are still near their all-time lows so those who didn’t refinance in the past month can still take advantage of low mortgage rates.  However the lows that we have seen since the beginning of the year may be gone for good and many say the strong economic news may lead the Fed to increase rates in June. 

The mortgage rate on a Conventional 30 year fixed rate loan rose to 3.875% while on a 15 year fixed rate loan the rate rose to 3.125%.  One year ago that same 30 year fixed rate was at 4.5%.

Mortgage lenders have seen record loan applications mostly for refinance loans since the start of the year due to record low mortgage rates.  Homeowners, some who obtained their mortgage only a year ago have been able to take advantage of the low rates to lower their mortgage rate and save money on their monthly payment.

The government in January lowered the mortgage insurance premiums on FHA loans in January which also served to stimulate activity on FHA streamline refinance loans.  This together with rates hovering near all-time lows for much of January and February have filled the pipelines of mortgage lenders across the country.

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