Mortgage rates were up slightly this week following an upbeat employment report showing that the economy added 155,000 jobs in December, Freddie Mac said in releasing the results of its latest Primary Mortgage Market Survey.

At 7.8 percent, the unemployment rate is now at its lowest point since December 2008. If unemployment continues to drop, the Federal Reserve is expected to scale back or end measures aimed at keeping long-term interest rates low.

Rates on 30-year fixed-rate mortgages averaged 3.4 percent with an average 0.7 point for the week ending Jan. 10, up from 3.34 percent last week but down from 3.89 percent a year ago. Rates on 30-year fixed-rate loans hit a low in Freddie Mac records dating to 1971 of 3.31 percent during the week ending Nov. 21, 2012.

For 15-year fixed-rate mortgages, rates averaged 2.66 percent with an average 0.7 point, up from 2.64 percent last week but down from 3.16 percent a year ago. Rates on 15-year fixed-rate loans hit a low in Freddie Mac records dating to 1991 of 2.63 percent during the week ending Nov. 21, 2012.

Rates on five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) loans averaged 2.67 percent with an average 0.6 point, down from 2.71 percent last week and 2.82 percent a year ago. That’s a new low in records dating to 2005.

One-year Treasury-indexed ARM loans averaged 2.6 percent with an average 0.5 point, up from 2.57 percent last week but down from 2.76 percent a year ago. Rates on one-year ARM loans hit a low in records dating to 2005 of 2.52 percent during the week ending Dec. 20.

 

A separate survey by the Mortgage Bankers Association showed demand for purchase loans was up a seasonally adjusted 10 percent during the week ending Jan. 4 compared to the week before, but down 8 percent from the same week a year ago.

To keep mortgage rates low, the Federal Reserve is buying $40 billion in mortgage-backed securities (MBS) issued by Fannie Mae and Freddie Mac each month. The Fed has said the open-ended program, which also includes $45 billion in monthly purchases of long-term Treasurys, will continue as long as the outlook for the labor market does not “improve substantially.”

The Fed intends to keep short-term interest rates at or near zero percent for as long as unemployment is above 6.5 percent and its projections show inflation remaining in check.

But the Fed hasn’t defined how much the labor market would have to improve before it dialed back or halted its purchases of MBS and Treasurys — purchases that are aimed at keeping long-term interest rates low.

Inflation “hawks” who worry that the Fed’s efforts to stimulate economic growth will lead to runaway inflation argue that policymakers should scale back such “quantitative easing” sooner than later.