The national average 30-year fixed mortgage rate climbed to a two-year high 4.51% for the week ending July 11, according to Freddie Mac’s Primary Mortgage Market Survey.
The last time rates were this high, was in July 2011 when they hit 4.55%.
This came on speculation that the Fed would soon reduce its bond purchase program after the bullish June jobs report.
“June’s strong employment led to more market speculation that the Federal Reserve will reduce future bond purchases causing bond yields to rise and mortgage rates followed,” Frank Nothaft chief economist at Freddie Mac said in a press release.
“The economy gained 195,000 jobs in June, above the market consensus forecast, while revisions to the prior two months added 70,000 on top of that. Moreover, hourly wages rose by 2.2 per cent over the last 12 months and represented the largest annual increase in nearly two years. However, the minutes of the June 18th and 19th Federal Reserve’s monetary policy committee meeting, released July 10th, stated that many members indicated further improvement in the outlook for the labour market would be required before it would be appropriate to slow the pace of bond purchases.”
Many are concerned that this will me a major headwind to the housing recovery.
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