The 30-year fixed-rate mortgage jumped six basis points, while the 15-year fixed climbed seven basis points and the 5/1 ARM went up two basis points, according to a NerdWallet survey of daily mortgage rates published by national lenders.
The average 30-year fixed rate is four basis points higher than its five-day running average, and 43 basis points higher than one year ago. Today marks the largest single-day jump in the 30-year fixed since April.
The abrupt rise in mortgage rates follows a disappointing employment report for September. The overall economy shed jobs for the first time in seven years, as nonfarm payrolls fell by 33,000. Normally, a net loss of jobs would be interpreted as a sign of a weakening economy, and would be followed by a decline in mortgage rates. That didn’t happen this time because bond traders focused their attention on two other numbers: wages and the unemployment rate.
Wages and unemployment rate improve
According to the U.S. Bureau of Labor Statistics, hurricanes Harvey and Irma led to a loss of 105,000 jobs in restaurants and bars. Those job interruptions largely pushed nonfarm payrolls into negative territory. But the missing restaurant jobs might have helped do something else: push average hourly wages higher. Restaurant jobs are relatively low-paid, so the loss of 105,000 food-service jobs might have boosted the average hourly wage, at least temporarily.
The average hourly wage rose 12 cents in September, to $26.55, according to the BLS. Average weekly earnings went up more than $4.
On top of that, the unemployment rate fell to 4.2% from 4.4% the previous month. Higher wages and lower unemployment rates tend to lead to higher interest rates as the economy heats up. That’s appears to have driven investors to push bond yields and mortgage rates higher.
MORTGAGE RATES TODAY, MONDAY, OCT. 9:
NerdWallet daily mortgage rates are an average of the published annual percentage rate with the lowest points for each loan term offered by a sampling of major national lenders. APR quotes reflect an interest rate plus points, fees and other expenses, providing the most accurate view of the costs a borrower might pay.
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