U.S. mortgage rates fell after a weaker-than-expected jobs report drove investors to the safety of the government bonds that guide borrowing costs.
The average rate for a 30-year fixed mortgage was 4.41 percent this week, down from 4.51 percent and the lowest since November, according to a statement Thursday from Freddie Mac. The average 15-year rate dropped to 3.45 percent from 3.56 percent, the McLean, Va.-based mortgage-finance company said.
The U.S. in December gained the fewest jobs in two years, Labor Department figures showed last week, bolstering speculation that an uneven economic recovery may slow the pace of the Federal Reserve’s cuts to its bond-purchase program. Yields on the benchmark 10-year Treasury notes fell the most since September after the report.
“I view this as nothing more than a brief dip in rates,” Greg McBride, chief financial analyst at Bankrate.com, said in a telephone interview Wednesday. “The long-term trend is still higher, contingent on additional evidence of an improving U.S. economy. If we got more bad economic news, rates would drop further, but be careful what you wish for.”
U.S. employers added 74,000 jobs last month, compared with the median forecast for 197,000 positions in a Bloomberg News survey. About 2.2 million jobs were added last year, the most since 2005.
Fed policy makers have said they will gradually reduce the pace of bond buying as the economy strengthens. The committee in December decided to cut purchases to $75 billion, from $85 billion, citing improvements in the labor market.
The stimulus has kept borrowing costs at historic lows, adding support to a housing rebound that’s also been driven by a tight inventory of homes for sale. Home prices in November rose almost 12 percent from a year earlier, data from Irvine, Calif.-based CoreLogic showed.