Mortgage rates under 4% becoming harder to find, Freddie Mac says
The big government-controlled loan buyer reports that lenders were offering the loans to well-qualified borrowers early this week at an average rate of 4.12%. That was a jump higher from 3.94% a week earlier, the only sub-4% rate recorded in the survey's 40-year history.
As usual in the Freddie Mac survey, borrowers would have paid less than 1% in upfront lender fees to obtain the loan. Rates lower than those in the survey often are available to solid borrowers who shop around or pay additional points upfront.
Rates for 15-year fixed loans and adjustable-rate mortgages also rose, according to Freddie Mac, which looks at loans of up to $417,000.
Jumbo mortgages, which vary by region but are defined as more than $625,500 in much of coastal California, were running more than half a percentage point higher, with Wells Fargo listing its jumbo rate at 4.75% Thursday morning.
Freddie Mac economist Frank Nothaft said a better-than-expected unemployment report had fewer investors running for the safety of U.S. government securities.
That pushed the yield higher on the 10-year Treasury note, and mortgage rates followed as they usually do.
"The economy added 103,000 workers in September, aided by the return of striking Verizon workers," Nothaft wrote. "In addition, revisions to July and August figures added a total of 99,000 jobs to payrolls."
Thus, as so often happens, better news for the economy meant higher rates for people buying or refinancing houses.
--E. Scott Reckard
Photo: Freddie Mac headquarters. Credit: Pablo Martinez Monsivais / Associated Press