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Mortgage Rates Lifted by Encouraging Employment News

Strong employment reports boosted mortgage rates back up for the second week in a row, Freddie Mac reported Thursday.


The GSE's ""Primary Mortgage Market Survey"":http://www.freddiemac.com/pmms/ shows the 30-year fixed averaging 3.59 percent (0.6 point) for the week ending August 9, an increase from 3.55 percent the previous week.

The 15-year fixed also posted gains, averaging 2.84 percent (0.6 point) for the week, up from 2.83 percent a week ago.

The 5-year adjustable-rate mortgage (ARM) followed, increasing to 2.77 percent (0.6 point) from 2.75 percent the week before. The 1-year ARM actually continued to drop, however, falling to 2.65 percent (0.4 point) from 2.70 percent previously.


Frank Nothaft, VP and chief economist at Freddie Mac, said the week's positive employment news may be a sign of more growth to come.

""Fixed mortgage rates inched up again this week following stronger-than-expected employment reports. The economy added 163,000 jobs in July, well above the market consensus forecast of 100,000 and the largest increase since February,"" Nothaft said. ""In addition, the number of announced corporate layoffs fell 45 percent in July compared to last July and was the third time this year that announced layoffs were less than the same month in 2011, according to The Challenger Report. This suggests further net gains in employment are likely in the near future.""

""Bankrate"":http://www.bankrate.com/ reported marginal gains in mortgage rates. The 30-year fixed increased to 3.81 percent (from 3.77 percent last week), while the 15-year fixed inched up to 3.00 percent (from 2.99 percent). Meanwhile the 5/1-year ARM stayed flat at 2.91 percent.

""With investors no longer feeling as if the sky is falling, at least temporarily, fixed mortgage rates did move a tad higher. Mortgage rates are closely related to yields on long-term government bonds. Should the better economic news continue, it would keep further Fed stimulus at bay, and likely push up rates a bit more, so stay tuned,"" Bankrate said.

About Author: Tory Barringer

Tory Barringer began his journalism career in early 2011, working as a writer for the University of Texas at Arlington's student newspaper before joining the DS News team in 2012. In addition to contributing to DSNews.com, he is also the online editor for DS News' sister publication, MReport, which focuses on mortgage banking news.

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