Mortgage rates drift higher on satisfactory economic news


As the stock market crept higher for most of the past week, mortgage rates went along for the ride. The good news is that mortgage rates are still lower than they were in March, which makes this a fine time to apply for a mortgage.

So far this year, it's hard to gauge the strength of the economy. Economic reports paint a fuzzy picture. For example, job growth was lousy in March and then got a lot better in April. The April unemployment rate fell to 4.4 percent - lowest since May 2007 - and average weekly earnings went up 2.5 percent year over year. Not great, but not bad. The satisfactory jobs report was enough to sustain the upward momentum of mortgage rates.

Meantime, the Federal Reserve's rate setters met last week and said that an economic slowdown in the first quarter of the year was "likely transitory." The Fed hinted that it probably will raise short-term interest rates twice more in 2017.

Put those events together, along with a gradually rising stock market, and it means that mortgage rates have had more reason to go up than to go down. And as rates rise, the sooner you apply for a mortgage, the better.

The benchmark 30-year fixed-rate mortgage rose this week to 4.22 percent from 4.18 percent, according to Bankrate's weekly survey of large lenders. A year ago, it was 3.75 percent. Four weeks ago, the rate was 4.22 percent.

The mortgages in this week's survey had an average total of 0.27 discount and origination points.

Over the past 52 weeks, the 30-year fixed has averaged 3.94 percent. This week's rate is 0.28 percentage points higher than the 52-week average.

The 15-year fixed-rate mortgage rose to 3.44 percent from 3.39 percent.

The 5/1 adjustable-rate mortgage rose to 3.48 percent from 3.46 percent.

The 30-year fixed-rate jumbo mortgage rose to 4.16 percent from 4.14 percent.

Mortgage rates have retreated since March, when they averaged 4.34 percent. That was the highest monthly average April 2014, when the 30-year, fixed-rate mortgage averaged 4.47 percent. The 30-year fixed has averaged 4.2 percent this month, making it a splendid time to get a mortgage.

At the current 30-year fixed rate, you'll pay $490.19 for every $100,000 you borrow, up from $487.85 last week.

At the current 15-year fixed rate, you'll pay $711.94 for every $100,000 you borrow, up from $709.49 last week.

At the current 5/1 ARM rate, you'll pay $447.93 for every $100,000 you borrow, up from $446.81 last week.