The average annual percentage rate (APR) on a 30-year fixed mortgage rose to 7.07% on Wednesday, November 4, according to rates Zillow provided to NerdWallet. That is a 14-basis-point increase from the previous day, although the rate is still 25 basis points lower than a week ago. One basis point equals one-hundredth of a percentage point.
The increase followed labor market data released Tuesday. The US Labor Department reported that job openings reached 7.5 million in September, a four-month high. Hiring also picked up, while layoffs declined.
Investors and lenders will be watching the October jobs report, scheduled for Friday, November 6. Strong employment figures could strengthen expectations that the Federal Reserve will raise its benchmark overnight borrowing rate at its December 8-9 meeting. The Fed does not set mortgage rates directly, but lenders may adjust them when they expect the federal funds rate to rise.
Inflation is another factor in the outlook. The September Personal Consumption Expenditures price index, the Fed’s preferred inflation measure, showed prices up 3.6% year over year, compared with 3.4% in August. The October PCE report is due November 25.
Mortgage rates can change daily, and sometimes several times a day, in response to economic data and market movements. Individual offers also vary according to factors including credit score, debt-to-income ratio, employment history, down payment, loan type, location and property type.
Sources: NerdWallet.