Economy Watch: Mortgage Rates Spike

The recent uptick in interest rates has begun to have an impact on mortgages, according to Zillow.

By Dees Stribling, Contributing Editor

The recent uptick in interest rates has begun to have an impact on mortgages, according to Zillow on Tuesday. The company reported that mortgage rates for 30-year fixed mortgages were up this week, with the current rate borrowers were quoted on Zillow Mortgage Marketplace at 4.41 percent, up from 4.17 percent last Tuesday.

That’s the highest the rate has been in nearly two years. The 30-year fixed mortgage hovered between 4.2 percent and 4.3 percent early last week and spiked to 4.6 percent on Friday before declining near the current rate on Tuesday. The last time mortgage rates exceeded 4.4 percent was July 26, 2011, noted Zillow.

“Rates surged on Friday after a stronger-than-expected jobs report and upward revisions to prior months’ unemployment levels,” Erin Lantz, director of Zillow Mortgage Marketplace, said in a press statement. “This week, rate movement will depend on whether Wednesday’s release of the Federal Open Market Committee meeting minutes and Fed Chairman Ben Bernanke’s speech reinforce or depress market expectations of a September start of easing federal stimulus.”

Number of job openings refuses to budge

The Bureau of Labor Statistics, which always releases the Jobs Openings and Labor Turnover Survey on the Tuesday after the monthly employment numbers, reported that there were 3.8 million job openings on the last business day of May, little changed from April. The hires rate (3.3 percent) and separations rate (3.2 percent) also were little changed in May.

The number of job openings was little changed over the month in most industries, but rose in retail trade and fell in professional and business services. The number of job openings rose in the Midwest but was essentially unchanged in the other parts of the country.

The summary also reports the quits rate. Quits are generally voluntary separations initiated by the employee (for example, take this job and shove it), and as such the quits rate can serve as a measure of workers’ willingness or ability to leave jobs. The number of quits, according to the BLS, was little changed over the 12 months ending in May for total nonfarm, total private and government and in all four regions.

Small businesses less cheerful

Small business optimism, which has been rising lately, took a dip in June, the National Federation of Independent Business reported on Tuesday. The organization’s index dropped nearly a point (0.9) to come in at 93.5 for the month. Job creation plans were up, however, two points to a net of 7 percent of businesses planning to increase total employment.

Wall Street had another up day on Tuesday, with the Dow Jones Industrial Average gaining 19.43 points, or 0.56 percent. The S&P 500 was up 0.5 percent and the Nasdaq advanced 0.72 percent.

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