U.S. mortgage rates were little changed as investors awaited this week’s unemployment report and signs of the Federal Reserve’s next move on bond purchases.
The average rate for a 30-year fixed mortgage was 4.51 percent this week, down from 4.53 percent, according to a statement today from Freddie Mac. The average 15-year rate climbed to 3.56 percent from 3.55 percent, the McLean, Virginia-based mortgage-finance company said.
Fed policy makers will meet this month to consider the next step in their strategy to gradually reduce the pace of bond buying as the economy strengthens. The committee in December cut purchases to $75 billion, from $85 billion, citing improvements in the labor market.
“We’re in a bit of a holding pattern,” Millan Mulraine, a New York-based economist at TD Securities, said in a telephone interview yesterday. “We know what the Fed thinks about the economy and any change to this view will be dictated by the data. Friday’s employment report will be the first major test.”
Companies in the U.S. boosted payrolls by 238,000 in December, ADP Research Institute data showed. That compared with a 200,000 advance that was the median forecast of 36 economists surveyed by Bloomberg. Tomorrow, the Labor Department will release the unemployment rate and hiring figures for last month.
The Fed’s bond buying has kept borrowing costs at historic lows, adding support to a housing rebound that’s also been driven by a tight supply of properties for sale. Home prices in November rose almost 12 percent from a year earlier, data from Irvine, California-based CoreLogic showed this week.
The average 30-year mortgage rate reached a two-year high of 4.58 percent in August, up from 3.35 percent in early May, on speculation that the central bank would start to taper its stimulus.