Falling Mortgage Rates Follow Lackluster Employment Report

Freddie Mac released its weekly update on national mortgage rates this morning, showing average fixed rates edging down for the second week in a row.

Thirty-year fixed-rate mortgages (FRMs) plunged 11 basis points over the past week, falling to 3.43%, their lowest level since late January and still near a 65-year record low. Shorter-term 15-year FRMs also slid, falling nine basis points to 2.65% -- their lowest level since early January.

Variable rate mortgages, in contrast, were little changed. 5/1 ARMs dropped another three basis points to 2.62%. One-year ARMs, shed a single basis point -- and are now also at 2.62%.

Commenting on the numbers, Freddie Mac Vice President and Chief Economist Frank Nothaft attributed the steep fall in FRMs to March's "lackluster employment report ... The economy added just 88,000 net new jobs last month, about one-third as many as February and the fewest since June 2012. In addition, approximately 496,000 people left the workforce."

Adding to the pressure on mortgage rates, Nothaft noted, was the fact that average hourly earnings showed no improvement in March, "indicating income growth remains tepid."

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