Average 30-year mortgage rates rise to 3.18%

BLong-term mortgage rates increased slightly as the U.S. economy showed signs that the worst of the coronavirus-fueled recession may have passed.

The average interest charged on a 30-year mortgage was 3.18% this week, up from 3.15% a week ago, according to a report Thursday by mortgage buyer Freddie Mac. That average is down from 3.82% a year ago.

The economic collapse following the COVID-19 outbreak has corresponded with a decline in mortgage rates. But there are signs that the economy may have already bottomed as government data shows that applications for jobless aid — though still historically high — are steadily falling.

The average 15-year mortgage rate was unchanged from last week at 2.62%. This average has fallen from 3.28% a year ago.

Wednesday that businesses have let go of a combined 22.6 million jobs since March, with the bulk of the layoffs occurring in April. The virus forced employers to shutter offices, factories, gyms and schools, while demand for gasoline, clothing, airline tickets, hotel rooms and restaurant meals quickly vanished.

Barring a second wave of the outbreak and with some additional government support, Mark Zandi, chief economist at Moody’s Analytics, said the COVID-19 recession appears to have only lasted three months.

“It will be the shortest recession on record, but it will be among the most severe,” Zandi said on a call with reporters.

The damage was concentrated in two sectors. Manufacturers cut 719,000 jobs in May. The trade, transportation and utilities sector let go of 826,000. Other sectors that suffered as part of April’s 19.6 million job losses saw their layoffs slow sharply. The leisure and hospitality industry—which includes hotels and restaurants—shed 105,000 jobs last month, down from a revised 7.7 million losses in April.

The private industry report comes two days ahead of the official monthly job figures from the U.S. Labor Department. Economists expect the Friday report will show 8 million job losses in May as the unemployment rate approaches 20%.