Jobs & Mortgage

Today the Labor Department reported that U.S. nonfarm payrolls increased by 243,000 in February. Average hourly earnings increased by 5 cents in February to $16.47, up 0.3%. The unemployment rate was at 4.8%.

With all these good news for the American economy in hand, the Financial markets are beginning to think that the Fed will hike rates three more times this year, instead of two. This is putting upward pressure on mortgage rates too. The reports on stronger-than-expected gains in manufacturing and service industries are also fueling speculation on higher mortgage rates.

The long-term mortgage rates turned rather sharply up this week after 2 weeks of decline. The 30-year fixed rate has reched its highest level in over two and a half years. According to Freddie Mae's weekly report, the 30-year mortgage had a national average of 6.37%, up from 6.24% a week earlier, and the highest level since Sept. 5, 2003 when it averaged 6.44%. Last year at this time, the loan averaged at 5.85%. The average on the 15-year mortgage was at 6%, up from last week's average of 5.89%. A year ago, the 15-year averaged 5.38%.

The 5-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 6.03%, up slightly from last week's 5.97%. A year ago, the five-year ARM averaged 5.22%. The 1-year Treasury-indexed ARMs averaged 5.45%, down from last week's average of 5.34%. At this time last year, the one-year ARM averaged 4.24%.