More Americans are gainfully employed and wage growth is on an upswing. As a result, more families are considering homeownership in the near future. Bond yields, which are the benchmark for home loan rates, soared last week following a better than expected jobs report. Average hourly earnings also climbed last month. The 0.3 percent increase in wages is the best since 2009.
The U.S. economy added 200,000 jobs in January according to the Bureau of Labor Statistics. This is better than the 180,000 jobs economists anticipated in a survey conducted by Reuters.
The yield on the 10-year Treasury rose to 2.73 percent last week, its highest level since 2014. A strong economy is sparking worries about potentially high inflation, making bonds less appealing to investors causing prices to fall. As prices fall, yields rise and in-turn drive mortgage rates higher.
Currently, conforming no-point 30-year fixed mortgage rates are averaging 4.375 percent while 15-year rates are near 3.75 percent.
Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.