The average rate on a 30-year fixed-rate mortgage (FRM) rose to 3.02%, maintaining its position for the fifth consecutive week, according to a release from Freddie Mac and reporting from the Wall Street Journal.
In March of last year, the 30-year FRM averaged 3.29%. Freddie Mac Chief Economist Sam Khater said that while the figure is on par with a year ago, purchase activity has “cooled off” in recent weeks. Still, the government-sponsored mortgage enterprise expects sales to be strong in the spring.
Khater said that home purchasing would be in-part fueled by Federal Reserve policy.
“The Fed has seen the carnage from the last crisis, and they don’t want to pre-empt the recovery by starting to raise rates and choking off that nascent recovery,” he said.
Federal Reserve Chairman Jerome Powell has frequently reaffirmed the Fed’s policy on keeping interest rates low to stimulate the economy.
The news comes the same day as optimistic figures for non-farm payroll data from February were published. According to the report, the U.S. economy added 379,000 jobs, fueling economic growth as a slow but steady vaccine rollout continues.
Most job gains occurred in the leisure and hospitality sector, which added 355,000 jobs. Employment declined in state and local government education, construction, and mining, the report said.
Reduced restrictions on business and higher vaccination rates are contributing most to the increased rate of overall economic activity, Nela Richardson, a Ph.D. economist at human-resources software firm Automatic Data Processing Inc. (ADP), told the Journal. ADP estimates on the jobs report were twice as low as the actual figures.
“As we reopen the economy, inch-by-inch, that will unleash consumer spending and drive job growth, especially industries that have been most severely affected by the pandemic,” she said on Mar. 5.
The Congressional Budget Office estimated last month it would take until 2024 to recover all lost jobs from the pandemic.
James Knightley, chief economist at ING Think, said in a Mar. 5 note that the boost in job growth would only continue as restrictions ease and more people are vaccinated.
“The ongoing positive effects of the rescinding of the California stay-at-home order, the reopening and expansion of dine-in eating in many cities, and a likely pick-up in hiring post the recent winter storms (particularly construction) should boost the jobs figures in March,” he wrote.
Other figures point to potential in economic expansion. Households have saved $1.5 trillion since the start of the pandemic, while housing and retail sales figures in 2021 have indicated positive sentiment, too.
Still, a more robust recovery is needed to bring the economy back to pre-pandemic levels. Throughout the COVID-19 pandemic, joblessness has fallen disproportionately on women and racial minorities in the American workforce because they were more likely to hold in-person service jobs that could not be performed from home, the Journal added, citing economist input. Vaccination demographics have reflected this similarly.
