By Prashant Gopal
WASHINGTON - U.S. mortgage rates for 30-year loans rose to a six-month high after stronger-than-expected employment growth drove up yields for the government securities that guide home loans.
The average rate for a 30-year fixed mortgage was 3.63 percent in the week ended today, up from 3.52 percent and the highest level since late August, McLean, Va.-based Freddie Mac said in a statement. The average 15-year rate climbed to 2.79 percent from 2.76 percent.
The 10-year Treasury yield reached an 11-month high on March 8, after the Labor Department said employers added 236,000 workers in February, more than economists projected, and the jobless rate fell to 7.7 percent. The U.S. property market is recovering from a five-year slump as job gains and low interest rates fuel demand.
“There is a feedback loop between the state of the economy and the housing market,” Patrick Newport, an economist at IHS Global Insight in Lexington, Mass., said in a phone interview yesterday. “When you get more jobs, people are more likely to buy homes.”
The Mortgage Bankers Association’s index of home-loan applications declined 4.7 percent in the period ended March 8, after climbing 14.8 percent in the prior week. The refinance gauge fell 5.2 percent, while the purchase measure dropped 2.5 percent, the Washington-based group reported yesterday.