Interest rates as of 4/30/06

Interest rates as of 4/30/06

	LOAN TYPE		TODAY	+/-	LAST WEEK
	30 yr fixed mtg		6.15%		6.11%
	15 yr fixed mtg		5.82%		5.78%
	5/1 ARM		5.81%		5.74%
	30 yr fixed jumbo mtg		6.38%		6.33%
	5/1 jumbo ARM		5.90%		5.85

Source: www.bankrate.com  Ratesinclude points

Interest Rates comments from HSH Associates

Excerpts from 4/13/06 newsletter:

In recent weeks, oil and gasoline prices have stomped higher, bringing renewed fears of an outbreak of inflation. Prices of precious and common metals have soared. With a Fed certain to stay the course of raising short-term interest rates, at least for a while longer yet, all interest rates have no place to go but up.

Backed by pretty fair economic data released this week, remarks by Fed Governor Donald Kohn helped to push 10-year Treasury yields solidly over 5%, pointing to higher fixed-rate mortgages in the coming days.Mortgage rates are being pressed higher as underlying costs of credit are rising. Spreads are compressing still, but the pressurecontinues to rise. The nine basis point rise in the weekly 10-year Treasury forced only a five basis point lift in the 30-year FRM.

Next week, we start on an upward note, but there are three things which could cause a tempering in rates: minutes from March's FOMC meeting might add some ambiguity about the need for higher rates this spring; the Producer Price Index might point to receding inflation; or the Housing Starts figure might note a coming train wreck for housing. We're expecting none of them to provide that kind of clarity, so 30-year fixed mortgage rates should add perhaps another five basis points.

Interest rate update

Interest rates as of 4/14/06

	LOAN TYPE		TODAY	+/-	LAST WEEK
	30 yr fixed mtg		6.11%		6.02%
	15 yr fixed mtg		5.79%		5.71%
	5/1 ARM		5.75%		5.67%
	30 yr fixed jumbo mtg		6.34%		6.25%
	5/1 jumbo ARM		5.88%		5.82%

Rates include points

Source: www.bankrate.com

Rolling Hills Estates City Council Gives Final Development Approval

On Tuesday, March 28, 20005, the City Council of Rolling Hills Estates gave final approval on a planned four story 58 unit condominium complex to be built at 627 Deep Valley Drive, replacing an existing car wash, and across from the Village Shopping Center, and the Peninsula Center Library. The Mediterranean-style complex will have units with two to three bedrooms, ranging in size from 1,377 to 2,648 Square feet., all with two bath rooms. No pricing has been set for the project. The project will also contain 5,810 of retail commercial space on the ground floor.

This development joins two other projects approved in 2004; Silver Spur Court, an 18 unit condo project  currently under construction at the corner of Crenshaw and Silver Spur (replacing the previous McDonald's restaurant), and Peninsula Villas, a 41 unit 55 and over condo development planned for what is now a parking lot between two buildings at 901 Deep Valley Drive. Another project, which will be a mix of medical offices, condominiums and ground floor retail, is also in the planning stages, to be located just west of the Post office on Deep Valley Drive.

Interest rates comments from HSH Associates

Excerpts from 3/31/06 newsletter:

With economic growth holding steady to firm, and short-term interest rates rising below them, there's no place for mortgage rates to go but up. If you think of the Fed Funds rate — an overnight lending rate, possibly the shortest term for a loan as a "floor" underneath all yields (interest rates), then raising that floor will ultimately have some effect on all other loan rates, to a greater or lesser degree. The Fed has been raising that floor for what is closing in on two years, and while ARM prices have been affected to great degree all along, only recently has that rising floor begun to affect long-term rates in a more permanent way. In essence, the flattening of the yield curve seen over the past 21 months — where short-term interest rates have marched higher while long rates have been mostly stable — has given way to a sort of "rising tide lifts all yield boats" relationship of late.However, that relationship isn't a linear one by any means. Movement of the shortest interest rate has only a muted effect on those at the other end of the curve, such as 30-year fixed mortgage rates. By example, the Fed Funds rate was lifted again this week by one-quarter percentage point at the close of the latest FOMC meeting. It was the fifteenth consecutive FOMC meeting which featured a lift in interest rates. In typical fashion, the Prime Rate rose by a like amount, but other rates along the curve moved to a lesser degree, as their yields are partially determined by inflation pressures, economic growth, and demand for a given instrument.

At the same time, while what the Fed does may have little direct influence, what the Fed sees and is reacting to in the economy is germane to fixed mortgage prices. This week, the Fed revealed that it believes that the economy has "rebounded strongly" after a slow Q405, where GDP expanded by just 1.7%. That rebound was accompanied by price increases which have now had a "modest effect on core inflation" (The Fed's prior characterizations noted "relatively low" levels of core inflation).

The market judged that a "modest effect" is somewhat more than "relatively low" and longer rates moved up fairly strongly as a result; the ten-year Treasury moved from 4.7% on Monday to about 4.85% by Friday, amid rising expectations for more Fed moves in May and beyond.Absent a recession looming in the foreseeable future (and caused by a Fed which has overshot in its tightening campaign), long-term rates have no room to fall; they are literally at the floor along with short-term rates. Interestingly, though, unless inflation really flares higher from these levels, or mortgage or Treasury bonds fall out of favor as a preferred investment, they have little reason to bound higher. However, they are likely to move upward as the floor moves upward, perhaps a bit more or less at times as inflation concerns wax and wane.

Interest Rate Update

	LOAN TYPE		TODAY	+/-	LAST WEEK
	30 yr fixed mtg		5.98%		5.88%
	15 yr fixed mtg		5.67%		5.57%
	5/1 ARM		5.67%		5.59%
	30 yr fixed jumbo mtg		6.23%		6.16%
	5/1 jumbo ARM		5.82%		5.77%

Source: Bankrate.com 4/3/06 Rates include points