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Mortgage rates inched up on Friday: The average 30-year mortgage rate is 3.49%, which equates to a $448.49 monthly payment per $100,000 borrowed. A month ago, the equivalent payment would have been lower by $7.22.

If you opt for a shorter term, the average 15-year mortgage rate is 2.74%, which equates to a $678.15 monthly payment per $100,000 borrowed. A month ago, the equivalent payment would have been lower by $5.22.

Rate (national average)

Today

1 Month Ago

30-year fixed jumbo

4.13%

4.35%

30-year fixed

3.49%

3.36%

15-year fixed

2.74%

2.63%

30-year fixed refi

3.52%

3.41%

15-year fixed refi

2.77%

2.65%

5/1 ARM

3.04%

2.92%

5/1 ARM refi

3.17%

3.02%

5/1 ARM = ADJUSTABLE-RATE MORTGAGE WITH AN INITIAL FIXED FIVE-YEAR INTEREST RATE. DATA SOURCE: BLOOMBERG.

Strong October jobs report sets up a December rate hike, but expect rate rises to be gradual

The employment situation report for the month of October was well-received on Friday. The addition of 161,000 jobs to nonfarm payrolls was within Bloomberg's range of estimates of 155,000 to 200,000. That figure was bolstered with upward revisions for August and September totaling 44,000. The unemployment rate fell to 4.9% in October, from 5%, in line with the consensus estimate. Most noteworthy, perhaps, were average hourly earnings, which rose by 0.4%, above the 0.2% to 0.3% range of estimates.

Despite these results, the market-implied probability of a December interest-rate rise fell from 78% to 74% on Friday, according to data from Bloomberg. The probabilities are derived from prices in the federal funds futures market.

Speaking at the 2016 Realtors Conference and Expo this morning, Federal Reserve Bank of Atlanta president Dennis Lockhart said of this morning's report, "the top-line numbers look solid." He went on to say:

I anticipate a very gradually rising interest rate environment over the next two years. ... And when the rate environment does reach steady state, mortgage rates should still be low and affordable by historical standards.

Mr. Lockhart is not a member of the Fed's interest rate-setting committee.

The interest-rate cycle is turning, but the turn will likely be very gradual, which is good news for prospective homebuyers.