30 year fixed rates stayed steady for the third week in a row at 4.10%, this according to the most recent national mortgage rate survey conducted by Freddie Mac. This rate has now been at or below 4.15% for each of the last eight weeks and the 4.10% equals a 52 week low. The 15 year average rate fell three basis points from 3.25% to 3.23% while the 1-Yr ARM also shed a point to 2.38% from 2.39%. A year ago, the 30 year mortgage rate was 4.57% and the 15 year pegged at 3.59%.
That’s quite a difference and completely opposite what most economists and investors expected. In fact, most were expecting rates to continue their upward swing and push past the 5.00% barrier.
The unemployment report released last Friday was much weaker than expected. So much so that many are ignoring the numbers and waiting for the revision which will be available later this month. The unemployment rate did in fact fall to 6.1% but it was the paltry job creation count that hit the skids. For each of the previous six months, the number of new non-farm payroll jobs created surpassed 200,000 yet the August count reported just 142,000 jobs added. While that’s another month of job creation instead of a job loss the number made investors cautious.
It will be somewhat of a light week in terms of economic numbers with perhaps Retail Sales having some sort of impact but other than that, economic reports should be rather benign. Investors are still keeping their eyes on the European Central Bank moves of last week and especially the tenuous cease-fires in Ukraine and Gaza. If in fact these skirmishes subside investors will then look toward the Fed for guidance for any hint of rate increases in the near future. Yet if the August payroll numbers hold firm come the revision, it’s likely the Fed will sit on the sidelines and leave rates alone for now.